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Pre-Pack Administration

Pre-pack administration is a process in which your company’s assets are marketed in the run up to it entering into administration.

Is your company insolvent? If you’re the director of an insolvent company, you need to take action immediately to prevent your company from being liquidated through a winding up order by its creditors.

Pre-pack administration is an insolvency solution that allows your business to sell some or all of its assets, such as equipment or existing contracts. In many cases, the company’s assets can be sold to you and other company directors.

A successful pre-pack administration sale allows your company to raise money to pay its creditors, while preserving some parts of the business in the form of a new company.

Do you have questions about the pre-pack administration process? Contact us to learn more about how pre-pack administration could let you save your business, successfully pay creditors and continue trading.

 

 If you feel your business is in financial difficulty it is important to deal with it immediately. Call now on 0845 676 9033 for free confidential advice, or visit our contact us page.

Introduction to FRP

  • What is pre-pack administration?

    Pre-pack administration is a process in which your company’s assets are marketed in the run up to it entering into administration. As part of a pre-pack administration sale, the company’s assets can be sold to its directors or to an unrelated third party.

    A successful pre-pack administration sale benefits both the company’s directors and its creditors. The company’s directors can resume trading via a new company, while its creditors receive cash raised by the sale of the company’s assets.

    Unlike many other insolvency procedures, pre-pack administration also allows your company to preserve jobs and contracts. This makes it a popular insolvency option for companies struggling with excessive liabilities.

     

    Is pre-pack administration suitable for your company?

    Not all companies can take part in a pre-pack administration sale. In order to enter into a pre-pack administration deal, your company should fit several qualifications:

    ·         As part of the pre-pack administration process, your insolvency practitioner needs to show creditors that pre-pack administration is the most beneficial option.

    ·         Your company must be insolvent to enter into pre-pack administration. If a company is insolvent but struggling, other options are more suitable than a pre-pack administration sale.

    ·         The party that buys your company’s assets – which can include the directors of the company – must purchase its assets at a fair market rate, to ensure the needs of the company’s creditors are prioritised.

    Our team has assisted hundreds of struggling UK businesses move through the pre-pack administration process and will be happy to provide assistance and advice on entering into pre-pack administration.

     

    What are the benefits of pre-pack administration?

    Pre-pack administration has several benefits for directors and creditors. Directors can resume trading using a new company that purchases certain assets from their previous business.

    This allows jobs, contracts and other important assets to be preserved, preventing them from being liquidated in order to repay creditors. A successful pre-pack deal can let a business continue operating without significant interruptions or delays.

    Successful pre-pack administration also benefits a company’s creditors by ensuring assets are sold at fair market value. In many cases, pre-pack administration can lead to creditors recovering more cash than the liquidation process.

     

    Contact us to learn more about pre-pack administration

    Pre-pack administration is a complicated process, and not all businesses are suitable for a pre-pack deal. However, it’s also one of the most suitable options for insolvent companies that still have valuable and potentially viable assets.

    Our business recovery experts have provided advice and assistance to hundreds of UK companies. Contact us now for a free initial meeting to learn about the pre-pack administration process and find out how we can help your company recover.