Evaluator Reports

The requirement for an Evaluator's Report was introduced by The Administration (Restriction on Disposal etc. to Connected Persons) Regulations 2021 ('the Regulations').

The Regulations were introduced to provide transparency to stakeholders where a company in administration (acting via its administrator) seeks to make a substantial disposal of assets to parties connected to the insolvent company within eight weeks of the administration. In the absence of prior creditor approval of the transaction, the administrator may not make such a disposal without an Evaluator's Report.

The Evaluator is tasked with examining the proposed transaction and its terms and then providing their opinion on the proposed transaction. The Evaluator will determine either that they are satisfied that the consideration to be provided for the relevant property and the grounds for the substantial disposal are reasonable in the circumstances, or that they are not satisfied.

The decision whether to proceed with the transaction is a matter for the administrator and the proposed purchaser. The Evaluator is not a party to the transaction, nor do they recommend that the transaction proceed. They provide an independent opinion on the transaction, which is intended to offer some transparency and reassurance to stakeholders.

It should be noted that, if the Evaluator determines that they are not satisfied with the proposed transaction, the administrator may still decide to proceed with the transaction.  The administrator must, however, set out the reasons why they decided to proceed.