Clifford Chance

New regulations to restrict disposals to connected persons in insolvent administrations

6 April 2021

From 30 April 2021, an administrator of an insolvent company may not make a substantial disposal within the first eight weeks of an administration to anyone connected to the insolvent company unless he has either the creditors' consent or an independent evaluator's report provided by the purchaser.

The report must provide that the evaluator is satisfied that the consideration provided for the property and grounds for the disposal are reasonable in the circumstances (referred to as 'case made opinion'). If the report indicates that the evaluator is not satisfied as to the consideration and basis for the disposal, an administration may still proceed with the sale, but the administrator must explain why the sale has gone ahead and include that explanation when sending a copy of the report to creditors.

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