What Is A Pre-Pack Administration?
You’ve probably heard of companies ‘going into administration’. If the company is insolvent and facing serious threats from creditors, a licensed insolvency practitioner can be appointed by the court as an administrator. This protects the company from creditor claims and legal action, allowing the business to be restructured or prepared for sale.
While a trading administration protects the business, it can be expensive and also creates uncertainty and delay. Continuity is really important.
For most businesses, a pre-pack administration is a better option.
A pre-pack provides more certainty, continuity and control. Trading in administration can seriously damage the value of the business, but a pre-pack preserves this value by allowing the assets to be sold as a pre-agreed deal to new or even the original owners, shareholders or directors.
Effectively, the business can continue in a new form, with a much greater chance of success.