Pre pack administration involves selling of an insolvent business before it enters administration. Often, the purchasers are the previous directors of the business.
Before the pre administration is started, you don’t need to consult your creditors. This is a major advantage to the company as creditors cannot block the move like they can do if you choose a company voluntary arrangement. Although the creditors cannot do anything, it does not mean that the company can do anything without the creditors’ consent. Companies need to keep the detailed records of the entire proceedings as they may need to give an explanation on why they opted for a pre-pack administration package.
Before the business is actually placed into administration, it is important to decide upon the exact details of the sale. Once all the required paper work is done, the administrators can carry out the sale of the business. As this process can be especially sensitive, it can potentially affect many other parties. This is why everything has to be well documented and transparent. If you fail to do this, it can lead to negative repercussions further down the line.
If you think pre pack administration is the best course of action for your company, you should get in touch with a company that specialises in the pre pack administration. Thus, the process of pre pack administration can be simplified greatly.