A Pre Pack provides immediate protection against recovery action by creditors and ensures the business continues seamlessly without disruption to customers or staff.
When is a Pre Pack Administration Appropriate?
Pre Pack Administration is often the best course of action if one or more of the following factors apply:
- Some or all of the underlying business is viable and there is a desire to rescue it;
- The value of the business would be damaged by any interruption to trade;
- Customer loyalty and the goodwill or intellectual property of the business is directly linked to its current Directors and management;
- The business has insufficient cash flow to enable an Administrator to trade the business whilst a third-party buyer is sought.
If one or more of these factors apply to your business then it is likely that Pre Pack Administration will be a viable option.
How A Pre Pack Administration Works
When you have decided that Pre Pack Administration is the right course of action for your business we will complete a formal asset valuation and prepare a sale and purchase agreement together with formal notices for our appointment as Administrators. At this stage, we will also consider the transfer of any leases and hire purchase agreements.
When we are happy that all aspects of the Pre Pack have been agreed, we will arrange for the sale to complete and for our appointment as Administrators to be formalised. You are then free to trade forward in your new business, free from your historic liabilities.
A Pre Pack typically takes between 1 and 4 weeks to complete from initial discussions to formal sale of assets to the purchasing company. The exact amount of time taken depends on the level of creditor pressure you are under and the complexity of your business structure.
The cost of a Pre Pack is based on the value of the assets to be purchased. This value is determined by valuation agents who specialise in valuing assets in insolvency processes. If the asset value is considerable, it will usually be possible to agree payment over a deferred period provided the return to creditors is preserved and adequate security is provided.
When you get in touch with us, you will speak directly to a licensed Insolvency Practitioner from the outset. We will take the time to understand your Company’s financial position, what your future intentions are for the business and ultimately what outcome you are hoping for. Based on this, we will be able to advise you on whether Pre Pack Administration is the best course of action and if so, the steps required to make it happen.
Due to the short time frame in which a Pre Pack is agreed and completed, we will always offer to meet with you at your premises and will take you through every step in detail. We will also keep you up to date with details of progress and of the time frame and costs throughout the process.