Pre-Pack Sale

H. Ali - Rochdale

"Once you explained how a pre-pack sale worked I knew straight away that it was the best way forward."

Pre-Pack Administration

Does your business have assets but is struggling to pay creditors through lack of cash flow?

Have you heard of a pre-pack or phoenix company and not sure if this would apply to you?

A pre-pack is an incredibly effective method of administration and allows the transfer of assets to a new or 3rd party company so that the old company can be liquidated.

A pre-pack can enable a profitable business to trade without disruption through the insolvency process, protecting staff jobs and business goodwill.

A phoenix company is a commercial entity which has emerged from the collapse of another through insolvency. The new company is set up to trade in the same or similar trading activities as the former, and is able to present the appearance of “business as usual” to its customers.

Company law in the UK has been formed to enable such activity in order to protect and promote entrepreneurship, by reducing risk and improving the chances of continued trading and business development. The law allows the directors of a failed company to be reinstated in the same, or similar posts in the phoenix company.

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Case Study 1 – Security Services Company

Contracts had not been costed properly and the accounting system was non existent. The company was leaking money and when we scratched the surface it was clear that large debts had built up.

Case Study 2 – Builder

The downturn in the housing market saw a major change in fortunes for this company. Contracts disappeared and existing projects were scaled back. Having taken on employees and bought additional equipment during the housing boom this left the business in an impossible situation.

Case Study 3 – Florist

Like most businesses this limited company saw a fall in sales as the recession took hold. Flowers were seen as a luxury item and with money tight customers dried up. The bigger wedding and corporate buyers also began to spend less.