What is a pre-pack? It is a type of administration where a sale of the business and assets is lined up before the appointment and completed by the administrator immediately or soon after he/she is appointed. The benefit is that the business can be sold intact and undamaged by a lengthy insolvency process. Approximately 50% of all administrations are pre-packs. Read more
Why have pre-packs got a bad name? Creditors are suspicious that a cosy deal has been done behind closed doors, often back to the company's former management. In recent years the regulations around this have been tightened and pre-packs are a useful option in the right circumstances.