If the current directors want to buy the assets, it will be necessary for the directors to buy out independent boards when setting up a new company. In addition, purchasing managers must finance the acquisition of the company`s assets to become new owners. However, payments can be deferred. A judicial administrator is legally required to ensure that a pre-pack sale gives the best result to creditors before recommending this procedure, in most cases it is the ideal solution for all parties. By streamlining the pre-order administration process, a pre-pack sale offers the following benefits: In a pre-pack administration, the sale of a company`s assets/transactions is negotiated with a buyer before a director is ordered, and the sale is made by the administrator as soon as it is ordered. In a regular administration, the director begins to manage and negotiate the business and negotiate after appointment, so that the process is slower and less predictable. A pre-pack administration is a planned insolvency procedure in which a company`s assets and activities are sold by the trustee to a designated buyer in advance, or shortly after the company`s appointment. The proceeds of the sale are intended to reimburse secured creditors in order to prevent them from exercising fixed rights and to protect the company from bankruptcy. The company can continue to operate continuously as its assets are sold and transferred, the way it preserves brand integrity and retains its customers/employees. Once an appropriate sales contract is entered into, the judicial administrator establishes a formal sales contract and submits it to the court.
The court then ordered creditors to allow the insolvent company to complete the administrative debt collection process, which protected it from further pressure. Under UK law, a company does not need the agreement of its unsecured creditors or the court`s authorization to initiate administrative proceedings before packaging. However, a certified judicial administrator must be appointed as a director. In a pre-pack sale, the directors of the insolvent company are able to acquire the assets/transactions and use them in a new business. The newly created company is commonly referred to as „Newco.” Although the administration has been the subject of pre-packing controversy in recent years, business management is a very legitimate and effective way to prevent businesses from closing completely and continuing to operate in the event of bankruptcy. You`ll find a more detailed overview of what happens during a pre-pack administration in the Pre Pack Administration Process Guide. The first step in arreiting a pre-pack sale is to assess the value of the assets of the troubled entity and determine the amount for which the assets can be sold. The soon-to-be appointed administrator will then be able to start looking for potential buyers and market the company`s assets in order to obtain the highest possible price.
Learn more about the benefits of pre-pack administration.