Pre Pack Administration
A Pre Pack administration is where the Administrator sells all or part of the business and assets quickly, prior to consultation with the creditors.
An administrator needs to be able to demonstrate that the overall net return to creditors has been maximised so this often can include minimising the liabilities as well as maximising the sale of the assets. An example of the reduction of liabilities is the transfer of employees under TUPE regulations as after a Pre-Pack sale the employees work for an alternative organisation.
In practice an Administrator satisfies himself that the optimum value has been obtained by instructing a professional Valuer to value the business and assets. When the Administrator is confident he has maximised the sale of the business, bearing in mind the limited time available for the saleability of the assets and preservation of the business, a sale can complete quickly (immediately). In these circumstances there is often a trade off between a very quick sale and prolonged marketing.
For more information about Pre pack administrations talk to us.