Email David Kirk direct by clicking on his name.

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 have control.

In more detail

If the company is insolvent then a pre-pack Administration can be a method of saving a business and allowing it to be sold to a new owner. This is even if the new owner is partly an old owner. The key issues are that the business has to have been advertised for sale and the buyer is paying the best price.

There are two legal definitions of insolvency and these are;

  1. The company has liabilities that exceed its assets.
  2. The company is unable to pay its debts as they fall due.

Using a pre-pack administration to take control of a business in a shareholder dispute is obviously going to leave the non-winning shareholder very unhappy but it is a legal mechanism to resolve the deadlock without going to Court.

tip

If you need insolvency advice the earlier you talk to someone like us the better as you will have more options. We can help, contact us today.

More questions in this section

Author: David Kirk - ACA FABRP
Everything you need can be done online.
No need to meet anyone in person.
We cover all of England and Wales.
Just a quick email to say a heartfelt thank you for your very calm, considered, expert advice regarding my circumstances on Tuesday. Things looked bleak before you explained my options much more clearly, in simple layman’s terms.
Rob Elliott (14th December 2021)

Menu

Newsletter

Sign up to our newsletter

Request a callback

Simply fill out the short form below and I will get back to you.

David Kirk Portrait

David Kirk

Licensed Insolvency Practitioner