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A Pre-pack is the term used where a sale of all or part of a company’s business or assets is negotiated with a purchaser prior to the appointment of an Administrator, and the Administrator effects the sale immediately on, or shorty after appointment.
The overall benefits of Administration apply here; however, the key objective with this strategy is that trading continues seamlessly, in order to preserve the value of goodwill, and customer relationships. Whilst a short term marketing exercise is put into place, the business continues to trade in the short term, whilst interest is explored.
As negotiations for the sale are carried out prior to the appointment of an Administrator, often the sale is completed in such a way that any work in progress is transferrable as part of the sale, in order that there is little to no disruption for customers, and the value of existing works is retained by the purchaser.
A pre-pack is typically beneficial to existing management wishing to buy back the business and assets, but is also an effective method of completing a sale to a third party whose interest the directors may have been aware of previously.
Why a Pre-pack Administration?
When exploring whether a pre-pack Administration is the most appropriate solution for your company, we will consider if any of the following factors apply:-
- All or part of the business is viable going forwards, and there is an appetite from management or a third party to purchase quickly
- Continuity of trade or supply is key to the overall value of the business and customer relationships
- There is insufficient working capital to continue to trade during a more extensive marketing period
The wealth of legal and financial qualification across our team ensures that we operate within all of the required legal guidelines while providing cost-effective and timely guidance. Our personable financial experts ensure you are given helpful and relatable advice that keeps you up-to-speed throughout the process. We offer peace of mind at a stressful moment through working to find a financial outcome that satisfies creditors, the government, shareholders and directors whenever possible.
We understand that many companies find themselves insolvent through no fault of the directors, so if circumstances have brought on financial difficulties, we help our clients to find a workable financial solution. If you want to discuss our available insolvency practitioners Bolton services, get in touch with us today. We act on behalf of our clients to find the best possible solution to their current financial difficulties.
Our expert financial staff are available to discuss options surrounding Liquidation, Administration and a range of other services we provide, with this advice offered through a free initial consultation. Additionally, if you are seeking an estimate on the price of a Liquidation process for your company, you can make use of our free quote calculator.
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3 Key Questions on Company Administration
What is the purpose of a company administration?
A company administration has a clear focus in terms of the desired aims. An administration is often entered into when a business has increasing debts, with no resolution presenting itself, and the directors are currently struggling to keep the business going in its current state. It’s a very stressful time for directors, who often feel guilty for the situation of the business. An administration offers them hope that the business could not only survive but can even be made profitable again, so finding the right company administration advice is a great help.
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What are the legal impacts of entering administration?
A company administration will halt any legal action against the company from creditors, giving the directors time to assess the business and get professional advice from an insolvency practitioner. Many of the clients we deal with at The Insolvency Experts have sought our advice as they have had mounting pressure from HMRC, or trade creditors and our first thought is always administration can we help turn this business around?
How do you find the right help with your administration process?
Given the range of benefits that can come from entering administration at the right point, it really can change the future of your company and give it a chance of coming out the other side of the process stronger. It can also help to protect the financial interests of the company directors, so it is vital to find the right company administration advice to ensure the process is carried out expertly and effectively.
Here at The Insolvency Experts, we have a great deal of experience in helping clients around the UK to complete their company administration in a reliable and timely manner. To speak to our expert team about your current financial situation and the support we may be able to offer, you can phone or email us today.
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