Every business can face challenging times. When it does, timely advice can make all the difference. One way we help is through a pre-pack administration, a process designed to protect the business, its people and its value while addressing financial pressure.
This is effectively a sale of the business and/or assets to a connected or unconnected buyer that completes soon after an administrator has been appointed.
In simple terms, it is a way to sell a business quickly after administrators step in, which can save jobs, keep the business running and protect value, all while dealing with debts in an organised way. It can be an effective way of maximising asset realisations for the benefit of the company’s creditors.
A pre-pack administration is usually considered when the business itself is viable but is struggling under unmanageable financial pressures or legacy issues. It works best when there’s someone ready to buy the business, and the directors want to protect staff and customers. It also helps prevent the disruption that can happen when a company ceases trading during a liquidation.
Here’s how it usually happens:
- First, we take a close look at the company’s financial situation and talk through the options available.
- Next, we get an independent professional valuation of the business and assets and test the market for buyers by way of an accelerated marketing campaign. The marketing process can last between 7-21 days whilst the company continues to trade.
- Formal offers would be sought from all interested parties with the preferred offer agreed prior to the appointment of administrators.
- Then, the administrators are officially appointed.
- The sale of the business and/or its assets happens immediately after the appointment of administrators, so the company can keep trading.
- Finally, everyone involved, creditors, staff, and stakeholders, are updated, and a report is circulated to all parties to make sure everything is transparent.
Working with a licensed insolvency practice means directors and advisors have experienced support throughout.
We work alongside accountants and solicitors to make sure every step is clear, fast and handled with discretion. The goal is always to give the business and its people the best chance of a fresh start.
