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Pre-Pack Administration

Sell your business and assets to get the best return and save jobs

Bridgestones has been here for 17 years, helping companies like yours go through Pre-Pack Administration and emerge with a viable business that saves jobs and is not weighed down by creditor pressure. We are experts at finding the right solution for your business and a Pre-Pack Administration is just one option that could be available to you.

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What is a Pre-Pack Administration?

A Pre-Pack Administration is where the sale of the business and assets is agreed prior to the company entering into Administration and completed immediately once the Administration Order is made and the Insolvency Practitioner appointed.

Everything is sorted out before the company goes into Administration and is completed as soon as it does. It is a “pre-packaged” event (hence the name) and provides the best return for creditors. A Pre-Pack Administration also often saves jobs and allows contracts to be continued, giving ongoing future work to the new business with the least disruption and lack of supply.

How Does a Pre-Pack Administration Work?

The key to a successful Pre-Pack Administration is a better return to creditors and lenders. To begin with, you will have to discuss your company’s affairs with an insolvency specialist, to make sure that it is the right route to take.

"We are specialists in giving Pre-Pack Administration advice. Call us on 0800 014 9836 for a free & confidential discussion."

When requested to go ahead, we arrange a valuation of the company’s assets by a specialist insolvency valuer and then agree how much for and how the business is going to be sold.

Existing directors usually have knowledge of their business and will want to maintain their existing customers, so will be prepared to pay a little more for getting a “working model” without the debts.

This all usually takes between 7 to 28 days but the existing business can continue in the meantime. There is no set time-scale for a Pre-Pack Administration to complete. The urgency of the situation will dictate the time it takes.

As independent insolvency specialists, we can often help see where the problems have arisen in the past and give guidance to ensure that the same issues and errors do not arise, or are not made in the future.

With a sale price agreed that will give the best return to creditors, an application is made to court to appoint an Insolvency Practitioner as Administrator.

Once the Administrator has been appointed, the sale is completed (usually the same day) and the business is moved to a new company that is free from debt.

If you think that finance for the new company may be difficult to obtain, Bridgestones can help you by discussing various situations and introducing you to an excellent range of finance providers. Call us now to discuss finance options on 0800 014 9836.

Advantages of Pre-Pack Administration

  1. The business continues through a new company free from debt.
  2. Customers and contracts remain in place.
  3. Employees jobs are saved.
  4. Creditors get the highest possible return.
  5. Administration process safeguards against unexpected legal action.
  6. The process of change from the outside appear seamless.

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Further Reading

Want to know more about Pre-Pack Administration? Read our detailed FAQ or contact our team for a free, confidential conversation via telephone or email.

  Pre-Pack FAQ

How Does a Pre-Pack Administration Help You?

If a company has got financial problems and has to go down the route of formal insolvency proceedings, then a Pre-Pack Administration may be an alternative to be used rather than liquidation, when there will be a better realisation for creditors. This is the key to any administration process, but especially in a Pre-Pack Administration, as it is quite often the existing directors and management that buy the business back.

There is nothing illegal in the directors of the old company buying the assets back through a new company, providing what is paid is more than it could otherwise have been sold for.

A Pre-Pack Administration can help save jobs as where the business continues in the new company and the employees remain, they will be transferred under the TUPE regulation and remain employed by the new company. This ready-made workforce is then in situ to help the new company continue and prosper.

So What Should You Do Next?

If you think that a Pre-Pack Administration could be the answer to your company’s problems, then contact Bridgestones today to discuss the company options you have. All our discussions are confidential and we can give you the advice you need to make the right decision.

We will want to meet with you to discuss all options and look at the structure of the current business. There may be alternatives to Pre-Pack Administration and with our experience over the past 17 years, we may be able to offer alternative solutions.

We will want to be involved in what the next steps are. We know it is your company and any major change is a big step. All our staff understand these difficult situations and are accessible and helpful to everyone.

"It only costs your time to call us and discuss your situation. It could be the most stress relieving call you make. Call 0800 014 9836 for free & confidential advice."

Pre-Pack Administration Case Studies

Case Study 1

The company was a specialist construction, safety, maintenance operator and had got into financial problems as a result of the build-up of unpaid tax liabilities, caused by historic bad debts.

The company had obtained some excellent contracts that were operating but were unable to come to an arrangement with HMRC to satisfy the existing liabilities and control of goods action had been instigated over the company’s machinery it needed for operational purposes.

The company employed 17 people and was considering going into liquidation, however, its main customer said that it would be in breach of contract if that happened and no outstanding debtor money would be paid. It was, therefore, agreed that this main contract, along with the others, could be transferred to a new company and so, protecting the outstanding revenue due to the old company and allowing 17 employees to retain their jobs inside the new business.

The Pre-Pack Administration was approved and the company now continues to flourish, keeping up-to-date with all outstanding creditor payments.

Case Study 2

The company operated two jeweller’s shops in the south of England and as a result of extensive construction works on the high street outside one of the shops, had seen trade reduce by over 60%.

The company had outstanding arrears to the landlord and the director had given a personal guarantee in respect of the company’s leases. In addition, the company owed various taxes that it was unable to pay.

A Pre-Pack Administration was approved, that meant the business could continue without the historic debt and the director of the former company was instrumental in purchasing the business and assets through a new company, for an amount that was higher than if the company had gone into liquidation and shut down.

Six employee jobs were saved and the company’s trading levels gradually rose back to a level that was sufficient for it to operate profitably through the new company, as a result of the Pre- Pack Administration.

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