The pre-pack system has been under investigation yet again but is seen as an unnecessary exercise. The government began another consultation to look into the practice that has given struggling companies a way to organize the business’ sale prior to it entering into insolvency. This results in the said company leaving the administration free of most of its heavy debt.

There was a previous proposal that creditors should be given a three-day notice prior to the effectivity of the pre-pack administration in order for them to challenge the said deal. But after months and months of consultation over this proposal, it seems the issue is alive again. This new movement in the issue even has the method’s critics surprised that this is being discussed yet again since criticism on the matter have calmed down over the past few months—unlike how it was during the peak of the financial crisis.

Pre-pack administration has helped a company like AEA Technology. It has once been part of the Atomic Energy Authority that has been advising both the US and UK governments. AEA couldn’t afford its pension liability worth £165m. That is why last November it entered into pre-pack administration and it was sold almost instantly for £18m.

This move has managed to save about 390 jobs but has left Lloyds, the group’s sole banker, with most of its estimated £48m worth of loans to the British-based company. A consultancy called Ricardo, AEA’s buyer, did not take on the pension liability. Instead, they passed it on to Pension Protection Fund, a controversial move that tends to leave creditors that are unsecured quite vulnerable. When this happens, the pension fund is usually cast aside and will have to be saved by PPF.

To be honest, pension schemes and the PPF might not be as welcoming when it comes to changes in the practice, even if it is seen that pre-packs make for a good excuse to push liabilities on to the fund. However, PPF seems to endorse this revived consultation because it gives a company’s creditors a better understanding of what will happen to them at a company that is struggling. They want transparency to be included in the process so the parties involved would know what they were getting into.

But a few industry insiders believe that there has not been concrete evidence of pre-packing leaving any person or companies involved worse off than it has been. In fact, it may have aided in keeping pension liabilities under wraps with the help of PPF.