In
early December Allison Broad, Head of the insolvency monitoring team at the
ICAEW presented a webinar on fees estimates, SIP 9 and SIP 16. We summarise below what we see as the key
points of the SIP 16 part of the webinar, following on from our earlier article
about the fees estimates and SIP 9 elements of the webinar, but if you want to
listen to the whole webinar then click here.
SIP
16:
Apparently
only two applications were made to the pool in the first month of its existence.
Over the same period the ICAEW received nine SIP 16 statements involving connected
party sales, of which only one had been referred to the pool.
The
ICAEW will be using the SIP 16 statements as part of their desk top monitoring
and a couple of specific areas were flagged up.
First, they will be looking closely at those IPs undertaking connected
party pre-packs where there is no referral to the pool and/or viability
statement provided with the SIP 16 disclosure to see if there are any trends.
Secondly,
they will look at the timing of proposals. SIP 16 indicates that ideally the proposals
should be issued at the same time as the SIP 16 statement, and there was a
comment that in many of the SIP 16 statements that had not been complied
with. Where the proposals are not issued
at the same time, then the SIP 16 statement should include an explanation as to
why not, but again that was not included in many of the SIP 16 statements
reviewed. Where proposals are not issued
with the SIP 16 disclosure the ICAEW will be checking back with the IPs
concerned to find out when the proposals were actually issued. This mirrors
what we have always said: if you have the information to prepare a SIP 16
statement, then you have the information to prepare the proposals and that you
should do so at the same time, not least since it saves you some extra work.
One
positive in the SIP 16 statements highlighted was that they included reference
to SIP 1 and the need for the IP to comply with the Code of Ethics, with some
of them actually including links to the Code of Ethics, which was seen as a particularly
good idea.
Conclusion:
The
webinar is a useful first insight into the approach of the regulators, but
regulatory comment in a further 3/6 months when a far greater number of fees
estimates and SIP 16 reports have been reviewed, and there may even have been a
greater usage of the pre-pack pool, will be even more useful. We think that it is important that each of
the regulators provide information and commentary to IPs on these topics over
the coming months, whether it is by way of webinars, presentations at
conferences or by publishing articles.
Getting it right on fees and pre-packs is important, both to IPs in the
context of their individual cases, and to the profession as a whole given the
emphasis placed on them by The Insolvency Service.
