How Insolvency Practitioners Work on the Administration Pre Pack

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Administration pre pack is an insolvency procedure which allows the administrators of a failing company to quickly and legally sell its assets and business to a new buyer. It’s most suited to medium to larger companies and can be used as a solution to severe threats, such as a critical supplier withdrawing support or the threat of a winding up petition. Insolvency Practitioners (IPs) play a key role in this process, guiding the company through the complexities while safeguarding the interests of all stakeholders.

Assessing the Financial Viability

When a company enters administration, IPs first conduct a thorough assessment to determine whether or not a pre-pack sale is a viable option. They will consider factors such as the cost of the process and how it will affect the company’s underlying value.

If a pre-pack is decided upon, IPs will then work to arrange valuations and create a Statement of Affairs to be included in the Administrator’s proposal to creditors. This document will also detail why a pre-pack was the most appropriate course of action given the circumstances.

Facilitating the Sale

Once a suitable purchaser has been found, IPs will draft comprehensive sale agreements and negotiate the terms of the transaction. They will then oversee the completion of the sale, ensuring a smooth transition from old to new ownership. This will involve coordinating with the new owner’s lawyers and arranging any necessary approvals from regulators. Throughout the process, IPs communicate openly with creditors to keep them informed of progress and explain why the pre-pack is in their best interests.

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