The term pre-pack
administration is now widely used in insolvency circles. It is a term
used to describe a process whereby the insolvent company’s assets
are sold to a third party prior to the insolvent company going into
any formal insolvency process. It is most commonly used in conjunction
with the administration procedure. Pre-pack Administration can save
your business by writing off debt and emerging stronger as a Phoenix
company. We have specialist experience and offer practical advice.
Any deal is usually
agreed prior to the Insolvency Practitioner being appointed, but the
anticipated appointee may well advise on the terms and structure of
such a deal.
The pre-pack administration
processes are used as they are acknowledged as a good way of extracting
value from assets prior to an insolvency, when publicity can cause values
of goodwill and such like to be lost. It keeps staff and management
involved in the business, and assists continuity of trading.
The pre-pack is
also used where it is unlikely that sufficient cash will be available
to fund a trading administration, whilst potential buyers are sought.
Pre-packs have always been available but their use has spiralled in
recent years as many new types of businesses have found themselves insolvent.
The pre-pack has
been criticised in some quarters, as providing the creditors with a
fait accompli. The deal has been done and everybody has to take its
effects. Any decent Insolvency Practitioner will document the steps
taken to get maximum value and there will be good business reasons for
taking this type of action.
If your business
can be saved then you might want to take advice now
to save it, whether by restructuring, writing off personal or business
debts, dramatically improving cash flow by the several means available
and turning the whole business around.
If it cannot
be saved then you also might want to take advice to ensure
the fastest possible winding up and transition to a new business model
(if applicable) with the least damage to your own personal assets.
You can get a free
consultation with an expert with many years experience by filling in
the form below.
if you need help with personal debt (rather than business related debt)
go to our free debt
management plan application form.
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