Pre-pack administration is a formal insolvency procedure used to arrange the sale of an indebted companies’ assets prior to formally appointing a company administrator.
Pre-pack administration differs from a conventional administration as the sale of company assets is agreed beforehand. Pre-pack administration must be entered under the guidance of a licensed insolvency practitioner.
During the process, company assets are sold to an unconnected or connected party, such as the directors of the company and the proceeds from the sale will be used to pay creditors. All assets must be sold at a fair value as determined by an independent valuer.
Why choose Pre-Pack Administration?
Pre-pack administration can help save viable elements of a struggling company, protect jobs, and ensure business continuity. Creditors can typically generate a greater return through a pre-pack, rather than through company liquidation.
If your company is in financial difficulty, speak to a licensed insolvency practitioner to discuss the rescue and restructuring options available and if pre-pack administration is suitable for your company, creditors, and stakeholders.
For more information on pre-pack administration and company rescue options, visit the UK Liquidators website - https://www.ukliquidators.org.uk/director-advice/company-administration
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