Pre-pack Business Sales
Companies experiencing financial difficulties are often unable to obtain additional funding from their existing bank/financiers, and refinance may not be commercially viable.
The company may have historical debts that it is unable to service from existing finance lines or estimated future trading profits, however, the management believe that there is an underlying profitable business or a business that can become profitable through restructuring.
With professional and independent advice, it is often possible to save a business that is experiencing financial difficulties, safeguarding jobs, the business and maximising returns to creditors.
This is achieved through a pre packaged sale of the business (more commonly referred to as a pre-pack), whereby a sale of the business and assets of the floundering company is agreed with a phoenix company, often set up and managed by the existing directors and/or management team, prior to the appointment of an Administrator, Administrative Receiver or Liquidator.
Funding for the phoenix company is sourced in advance, to enable the sale to be completed immediately after the formal insolvency appointment has been made, ensuring that the business is acquired with the minimum of interruption to existing customers and ongoing trade.
As the sale is being completed by the Administrator, Administrative Receiver or Liquidator, this ensures that as a director of the company there can be no recrimination on you regarding the price achieved for the business and assets of the company, it can also be demonstrated through an independent valuation that the price achieved is a fair market price.
