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Administration Sales and TUPE: Normal Service Resumed

For many years, the accepted way to rescue a company and preserve employment and at the same time maximising return to creditors has been administration followed by the sale of the business and assets to a purchaser (usually by a ‘pre-pack’).

The automatic transfer of the employees to the purchaser under the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations invariably applied to a business sale out of administration. That remained the case until 2006 when a new regime (TUPE Regulations 2006) came into effect on 6 April of that year. This introduced an element of uncertainty for purchasers, administrators and employees. Fortunately that uncertainty has now been resolved following a clear Court of Appeal Decision in Key2Law (Surrey) LLP -v- De’Antiquis [2011].

Richard Baines, Head of Druces LLP’s Business Turnaround, Restructuring and Insolvency team and Scott Thistleton, a trainee solicitor at Druces LLP consider in detail the issues surrounding the uncertainty and its resolution by the decision in Key2Law in their latest article published in the In-House Lawyer, April 2012 issue

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