This article continues our Law-Now series "Harmonisation of Insolvency Laws in the EU" in which we provide an overview of the articles addressing insolvency avoidance actions of the draft EU directive.

As explained in the first part of the series, the differing national insolvency regulations of the 27 EU member states creates risks for investors, who will have to consider their investments in light of possible business failures and the resulting exposure to monetary losses.

When an employer is insolvent and administrators appointed, job losses are often an inevitable consequence. In this blog we look at the legal obligations arising where redundancies meet the threshold for collective consultation, and the implications for administrators arising out of the recent Supreme Court in the case of R (on the application of Palmer) v Northern Derbyshire Magistrates Court and another.

When does the legal obligation to collectively consult apply?

On 24 February, the Government published draft regulations that, if implemented, will impose new restrictions on pre-pack administration sales to connected parties. For all `substantial disposals' (which will include `pre-pack' sales) to connected parties, taking place within eight weeks of the administrators' appointment, the administrators will either need creditor consent or a report from an independent `evaluator'.

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