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Get expert legal help with pre-pack administration

If your company is being threatened with a winding-up petition, but has yet to be issued with one, you may be able to save your business by acting quickly.

What are pre-pack administrations?

Pre-pack administration offers a lifeline to companies that are struggling, but it is vital that you don’t waste any time if you wish to take advantage of the benefits this insolvency option can bring.

It involves the sale of your company to a third party in order to stave off the threat of a winding-up petition. 

The sale enables the business to be relieved of its debts and unwanted contracts, and some pre-pack administrations involve staff and management changes.

What is involved?

The process of a pre-pack administration sale involves firstly appointing insolvency practitioners to examine the circumstances of your business and prepare a report that is then shared with the board of directors.

The report should explore all potential insolvency procedures available to the company, and give explanations as to why a pre-pack sale was selected over other insolvency routes - it is subject to strict rules and measures (pdf), to which practitioners must adhere.

Your company’s directors will be required to come to a decision over whether or not they wish to proceed with the pre-pack sale, and if they do then a buyer will need to be identified.

Corporate insolvency law requires that insolvency practitioners market the business to potential buyers. If there is no interest in buying the business, then it can be sold to a selected third party, to existing directors of the company, or to a newly formed company.

Why choose First4Lawyers?

Expert legal services for your business needs - whether it's employment law, policies or commercial property, we can help.

Free initial case review

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All our solicitors are pre-vetted and experts in providing legal services for business

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What are the pros and cons of pre-pack administration?

  • The advantages
    If your pre-pack administration sale is successful, then your business will be able to continue trading without interruption. The value of your assets will be preserved, and the quick nature of pre-pack sales helps to minimise losses.
    Your insolvency practitioner will be able to select the most suitable buyer for your company, and your firm’s reputation won’t suffer from the kind of negative publicity that comes with other administration proceedings.
  • The risks
    It is important that your insolvency practitioner guards against the perception of abuse, and ensures that your company is in full compliance with the requirements of corporate insolvency law.
    The conduct of your company directors could be investigated by HMRC during or after your pre-pack sale, and this must be taken into account to ensure that no unexpected problems arise.

 

I believe my business may need to go into administration – what should I do?

Our experienced insolvency specialists can help you choose the type of administration to best meet your needs.

We can oversee the pre-pack administration process on behalf of your business.

Our team is adept at recognising when a pre-pack administration will be the most effective option, given a company’s circumstances.

Contact our legal advisors for a free, no-obligation chat to find out how we can help.

Do you have a legal question?

  • Get it answered within 60 minutes when you call during normal office hours.
  • Free initial advice from our trained legal advisors.

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