Pre Pack Administration

Pre pack administration is an insolvency procedure where a deal is stuck to sell the assts of the business before appointing administrators to facilitate the sale. It’s a powerful, legal way of selling the business on to a trade buyer or third party.

Alternatively, the existing directors can buy the assets of the old company by  operating under a new company (‘newco’). This is usually done if the business is facing serious problems and creditor threats

Newco will need to be viable and have funding in place so it can buy the assets of the old company (‘oldco’) at fair value.

If the company is under threat of a winding up petition it can be a useful restituting tool until a solution if found. However, pre pack administration is not permitted after a petition has been issued.

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