Pre-Pack Administration
The most commonly used product within insolvency services is pre-packaged administration. The deal is reached pre-appointment with an insolvency practitioner of our recommendation. This allows a phoenix company to purchase the assets back pre-appointment in preference to other creditors (with the exception of debenture holders).Phoenix Company BenefitsA phoenix company arises from the ashes of another. This accomplishes the recovery of a business that has a viable core but is unable to repay outstanding debts. It is a pragmatic arrangement that protects the interests of employees and private enterprise.Preserves jobs for Directors & employees;Achieves a write-off of debt arrears (not subject to debentures or personal guarantees);Releases the business from leases or contracts that may no longer be required;Avoids disruption to customers & other stakeholders.Advantages of Pre-Pack AdministrationPre-pack administration provides a planned, swift & secure transition to a new phoenix company.The sale of the business assets & undertaking is agreed in advance;The Director's personal credit history is protected;The business may apply to trade under a variation of the original name;Minimum disruption occurs and it is possible that some staff and customers may be unaware of the change;The existing company could eventually be dissolved by the as opposed to placing it in liquidation or bankruptcy. This reduces cross-contamination of reputation and credit worthiness;There is no creditor meeting for the liquidation of the old company, requirement for local advertising or filing in the local courts.The alternative recovery method is a Company Voluntary Arrangement (CVA) where the the existing company proposes reduced payment terms to creditors.