Senior figures in the insolvency profession have already voiced concern over the proposed changes, which include the introduction of a three day notice period prior to a sale to a connected party where there has been no open marketing of the assets.
According to Andy Brown, BPIF public affairs advisor, there was noticeable resistance to some of the proposed changes from certain representatives at a stakeholder meeting hosted by the Insolvency Service last week.
"There are certainly people who would like to water down some of the proposals and there was a bit of hostility towards some of the legislation that the Insolvency Service was putting forward," said Brown.
He added that the argument being put forward against the changes is that they could "kill pre-packs altogether" thereby preventing business rescues of some large companies that are making a significant contribution to the economy.
In a letter to the Financial Times prior to the announcement of the proposed changes, Richard Fleming, UK head of restructuring at KPMG, warned against exactly that.
He argued that any move that compromised the pre-pack mechanism would be "a step backwards for the insolvency regime", even if it was the result of "best-intentioned efforts to eradicate system abuse".
According to Brown, anti pre-pack sentiment in other industries probably doesn't run as high as in print because the capacity problem in print exaggerates the impact on the rest of the sector.
"Not all industries have the overcapacity problem that print has, which tends to make the effects of pre-packing so much worse in our sector," said Brown. "It would be a shame if [having come this far] the Insolvency Service lost its nerve and was tempted to water down the legislation.
"What we don't want to see, for example, would be for them to change it to 'targeted marketing' instead of 'open', because you then run the risk of the IP just sending it out to a tame list of people who would just respond that they weren't interested."
Brown admitted that, objectively, the Insolvency Service faced a difficult balancing act in terms of matching the needs of various different industries; however, he encouraged printers to submit responses to the proposed changes to help prevent them from being diluted.
"The policy at this point in time is not up for further consideration, so there's no point writing in to say 'these changes don't go far enough'," he said. "But what they are looking for are comments specifically on the proposals that they have published in this draft statutory instrument and it's now an open consultation so anyone can respond."
PrintWeek has uploaded a copy of the draft statutory changes, which can be viewed here. Comments on the changes need to be made in writing no later than Wednesday (29 June), either by email to ippolicy.section@insolvency.gsi.gov.uk or to Insolvency Practitioner Policy Section, 3rd Floor, Zone B, 21 Bloomsbury Street, London, WC1B 3QB.
