Pre Pack Administration

In the current economic climate, pre pack administration is becoming an increasingly popular route for struggling businesses to go down. Many UK companies are turning to pre-pack administrations to help them deal with overwhelming debt problems.

Pre-pack admin is a process in which the assets of a business are sold before it is forced into a formal insolvency process. It allows a business to be sold without creditor's approval, thereby protecting the company from creditor attack in the process. Pre-packs often involve the sales of businesses back to the existing management although this isn’t always the case.

Advantages of Pre Pack Administration can include –

• it preserves jobs for directors and employees
• writes off existing business debts
• releases your business from contracts and leases that may no longer be needed
• avoids disruption to customers
• can lead to a higher return for creditors
• existing connections with suppliers can be kept
• the sale of business assets is agreed in advance
• businesses may apply to trade under a variation of its original name

A common situation where pre-pack administration is appropriate is when a business is carrying debt that it can no longer afford to service but the core business may well still be viable. In this case the owners of the existing business form a new company which then buys the assets of the old company but leaves behind the debts.

Pre-pack administration is very useful when there are immediate threats to the viability of your business from your creditors. In simple terms in a pre-pack admin a buyer is lined up for the business before it goes into administration or liquidation. The process begins with an insolvency practitioner being appointed to take on the task of placing the business into administration and selling any assets. The assets and day to day trading of the business can be purchased by a new company who can continue to trade without the burden of the debts incurred by the previous company.

Pre Pack Admin Services & Advice for your Business

Pre pack admininstration is a popular solution for many businesses overwhelming facing financial difficulties. At Business Debt we provide a comprehensive service for businesses consider this option. We can provide a wide range of specialist accounting, financial and insolvency advice for your company. We can advise on pre pack administration, company voluntary arrangements and all other business debt solutions available to you then

If you would like further information, without obligation, call our business debt helpline free today on 0800 043 50 43 or complete our enquiry form and we will ring you back at a more suitable time.