Pre-pack administration

An accelerated administration process that requires expert handling.

Some pre-packaged administrations attract adverse publicity based on creditor unease that business owners have been able to do what appears to be a cosy deal and restart a business debt free.  Nevertheless pre-packs can be a useful tool to preserve value in a potentially viable business, help retain employment and provide a swift and better outcome for creditors.

More recently the regulations around pre-packs have been tightened requiring all insolvency practitioners to 'market' the business and assets or explain why not and encourage prospective connected party purchasers to carry out a viability review and to refer the deal to a new 'pre-pack pool' and share the outcomes with creditors, the influence being if those things are not done the deal is most likely a bad one. This is bound to lead to less pre-packs and more sales of business and assets out of liquidation with its attendant TUPE advantage.

You can read more about the marketing essentials in accordance with Statement of Insolvency Practice 16 ("SIP16") here

When might a pre-pack be appropriate?

  • When time is of the essence to maintain business continuity.
  • When the core value of the business might dissipate otherwise.
  • If there is a danger of losing key staff or harming client relationships through uncertainty.

Pre-packs require careful handling by experts.

How can McTear Williams & Wood help?

Our senior team are fully conversant with the new regulations and in the right circumstances can execute the pre-pack process quickly and ethically whilst safeguarding the value of the business. We can also justify the process to creditors and other stakeholders.

Businesses for sale

Sometimes there is a need to sell the business and/or assets arising out of an administration and you can find out more about businesses for sale both from McTear Williams & Wood and other insolvency practitioners at the UK’s leading insolvent business and asset website www.IP-BID.com – this is the UK’s online market place for buyers and sellers of businesses in distress.