What are the new rules governing connected sales in pre-pack Administrations?

The quick answer New rules governing the connected sale in pre-pack Administrations come into force on the 30th April 2021. This will mean that a company must be in Administration for at least eight weeks before the substantial business and assets can be sold to a connected party. In more detail The new rules covered […]

When Should I Use Pre-Pack Administration?

The quick answer A pre-pack administration is beneficial when you have an insolvent business worth saving and know a potential business buyer. This buyer may be the existing shareholders and management or alternatively you may know another possible buyer or feel that advertising would help find a buyer in a short period of time. In […]

Pre-Pack Administration – The Rules

The quick answer Pre-pack administrations are the sale of an existing business to a new business, subject to various rules that need to be complied with when operating in the UK. These include having the business and assets valued first, marketed for sale in some form and then the right disclosure beforehand to key creditors […]

Advantages And Disadvantages Of A Pre-Pack Administration

The quick answer A Pre-Pack Administration is a very effective and quick way of saving a business. However, they are not usually popular with creditors because they find out the business has sold after the sale has taken place and it is then too late to do anything about it. The term Pre-Pack Administration is […]

What Is A Viability Statement?

The quick answer This is used in a pre-pack administration to prove that the person buying the assets and business are viable themselves and will not fall quickly into insolvency. In more detail A viability statement is a requirement of Statement of Insolvency Practice 16 which covers all the extra reporting rules and requirements to […]

Guide to Pre-Pack Administration

The quick answer A Pre-Pack Administration is where the buyer of the business has been agreed before the date of the Administration order. On the date of Administration the business is sold and then the majority of the creditors, shareholders and employees are notified after the event. Pre-packs were designed to preserve the value of […]

The Difference Between Pre-Pack Administration And Company Voluntary Arrangements

The quick answer A pre-pack Administration means the company ends and a new one is formed. A Company Voluntary Arrangement means the existing company carries on. A CVA is a formal agreement with your creditors and means the existing company keeps going; so the same bank, licenses and qualifications, staff, offices, customers etc.  A Pre-Pack […]

What Is A Pre-Pack Pool?

The quick answer This is an independent body that the buyer of a business in Administration can approach to effectively endorse (or not) the purchase of the business using a pre-pack Administration. It is not a statutory requirement. In more detail The pre-pack pool was set up to attempt to address the issue of pre-pack […]

Can I Use A Pre-Pack To Settle A Shareholder Dispute?

The quick answer Yes you can. The company has to be genuinely insolvent (see the two definitions below) and the business has to be advertised for sale. If one of the shareholder/directors is the winning bidder they can buy the business back and take control even if the other owner does not want them to […]

Pre-Pack Administration

A Pre-Pack Administration is where the buyer of the business has been agreed before the date of the Administration order. This process is controversial and is covered by special reporting rules.