You may have heard of ‘pre-packaged administrations’ as they have received a lot of media coverage, or someone may have already suggested to you to find out about it.
In law, a pre-packaged administration is no different to any other administration, and everything we said about administration in the administration section will apply.
The difference between a ‘pre-pack’ and an ordinary administration is simply that the proposed administrator negotiates a sale of the whole or part of the business and assets prior to his appointment, with a view to executing the sale immediately on his appointment.
Used properly, this approach can provide genuine value for creditors but when a pre-pack takes place the administrator has to provide significant and early additional reporting of all of the company’s circumstances and justify fully the use of the procedure. Even more information must be given where the purchaser is in any way connected to the Company.
Live Recoveries can advise your Company whether consideration of a pre-pack sale of company’s business and assets may be an appropriate solution for it to consider.
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