If you are considering acquiring the business and/or assets of a financially troubled company, careful consideration should be given as to the best mode to achieve this, to ensure that the transaction can not be attacked and potentially overturned by any Administrator or Liquidator subsequently appointed over the company.
It may be perceived that there is conflict of interest if the company was to sell its business and assets to a phoenix company that has been set up by the failed company’s directors and/or management.
It is therefore imperative that such a transaction is seen to be conducted at arms length, by an independent person.
A transaction completed by an Insolvency Practitioner acting as an Administrator, Administrative Receiver or Liquidator is considered to be independent and is unlikely to be challenged.
Aside from the obvious tangible assets, consideration must also be given to the value of intellectual property and goodwill. Although these are not easily valued, they must be given careful consideration before any transaction takes place.
An independent professional valuation is the key to having a legitimate sale of assets from one company to another.
The assets of the company would be valued on two bases:
Whether you are a director of the failing company or an independent party there is often not sufficient time to undertake a due diligence review prior to completing the purchase of the business and/or assets.
This risk is reflected in the purchase price we are able to negotiate on your behalf and the funders we are able to introduce you to are commercially aware of the lack of due diligence and timescales involved with completing pre-pack deals.
Use our Online Enquiry Form or Contact Us on 0800 0735353 to arrange an initial visit with one of our consultants.
