Changes to Statements of Insolvency Practice 16 NI and Statement of Insolvency Practice 13 NI

The Administration (Restrictions on Disposal etc. to Connected Persons) Regulations (Northern Ireland) 2021 which came into effect on 25 June 2021 imposes additional obligations on connected person purchasers in administrations.

These legislative changes mean that changes need to be made to Statement of Insolvency Practice 16 - Northern Ireland (SIP 16) – pre packaged sales in administrations, and additionally the Statement of Insolvency Practice 13 - Northern Ireland (SIP 13) - disposal of assets to connected parties in an insolvency process, also need to be changed to align the content of the standards with the law. No changes have been made to the SIPs other than those required by the change in the law.

The Joint Insolvency Committee has amended SIP 16 to remove references to the Pre Pack Pool and to replace them with reference to the statutory obligation placed on a connected person purchaser to obtain the opinion of an evaluator. The regulations apply to transactions that take place within 8 weeks of the appointment of an administrator. This extends the scope of the regulations beyond pre pack administrations to all administrations within that time frame. That means equivalent changes had to be made to SIP 13 as it applies to any connected party transaction in an insolvency process.

The new SIPs will apply effective from 25 June 2021.