PRE-PACK ADMINISTRATION & A PHOENIX COMPANY

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UK insolvency legislation allows, when certain steps are followed, the transfer of the business of an insolvent company into a new, completely debt-free phoenix company. The sale is fully agreed in advance, and—subject to legal criteria—you can retain the existing business name, continue with contracts and customers, and have all debts of the troubled company written off.

In certain circumstances, Pre-Pack Administration is the most effective method of business rescue. It does not signal the end of the core business; rather, it marks the closure of the troubled limited company. By using Pre-Pack Administration strategically, the business can be restructured and seamlessly transferred to a phoenix company. The new company can continue trading completely debt-free, while benefiting from protection against creditor enforcement actions.

We guide you through every stage of the Pre-Pack Administration process, from initial assessment to the dissolution of the insolvent company. Our team will help you navigate potential pitfalls, restructure and streamline the core business, and ensure the ongoing phoenix company is positioned for stronger financial performance post-administration. We can assist with the smooth, legal transfer of business and assets from the insolvent company to a new, debt-free phoenix company, allowing your business to continue with minimal disruption.

Buy-back of the business (assets, contracts etc.) is agreed in advance

You purchase only the assets of your company that you want. You can 'cherry-pick' what assets, contracts etc. you want, and leave behind any non-productive assets and contracts. You will only pay a relatively small percentage of the inherent value of the business to you, as your company's assets aren’t worth much to third parties, so getting some value (albeit a 'fair and reasonable' one in the circumstances) from your new phoenix company is in most cases the best deal that can be obtained.

New, debt-free, company can trade under the same (or a variation of the original name) 

All legal action is stopped, and the business continues to trade solely under the control of the phoenix company

Seamless transfer of business ensures that minimal disruption occurs 

Customers are not necessarily contacted (they may well be unaware of the procedure)

Transfer of the business includes goodwill, customer list, IP etc.

The transfer of ownership can include the book debts (sales ledger) of the old business