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 business by allowing a very quick sale however they cause controversy because creditors find out about the sale and Administration after the event.
The sale must be at a fair market value and this is often to the existing directors or shareholders which is completely legal.
David qualified as a Chartered Accountant in 1990 and Licensed Insolvency Practitioner in 1996. David will give you clear and plain language advice about your business’s options and make a recommendation of which route he thinks will work best for you.
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Licensed Insolvency Practitioner