Advantages of a Pre-Pack - Pre–Pack Administration / Phoenix

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Advantages of a Pre-Pack

A pre-pack is when an insolvent company's business (and/or assets) are sold prior to the company going into an administration. A pre pack is all negotiated and agreed before a Licensed Insolvency Practitioner (IP) is appointed, and is then facilitated once the IP has been formally place in office.

Under the terms of a prepack the core business is usually sold with little or no open marketing. The creditors and customers are not usually of the pre-pack until it all ready to execute.

There are clear benefits to the pre pack process in the current economic climate such as:

  • A prepack enable a company business to continue to operate, whilst getting rid of their debilitating debts
  • In the current downturn with fewer buyers around, a pre-pack is a good option for many distressed businesses
  • The prepack process saves staff their jobs
  • Secured creditors get a satisfactory outcome
  • The goodwill of the business is saved.
  • The process is relatively quick and easy to arrange
  • The prepack process is often so efficient that often people have no idea that a prepack has taken place
  • Previous owners can buy back the businesses free of many liabilities
  • For an Insolvency Practitioner Pre-packs can be an invaluable tool for keeping a business trading and saving jobs

There are many advantages of a Pre-Pack Administration. Here we have listed most of of them. Please call our advice team today to get access to expert help.

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