Pre-pack administration
An independent pool
If you are looking to buy back your business as part of an administration process, it is recommended that your offer and business plan are reviewed by an independent pool who will offer their opinion on your planned purchase.
The concept came about because it was feared that directors were being encouraged to consider buying back their business without giving the matter serious consideration. Quite a few of business bought back fail because of lack of capital, resources or turnover.
For more information on the pre-pack pool please visit https://www.prepackpool.co.uk.
The link below will provide helpful questions and answers to assist applicants, IPs and others gain an understanding of how the Pool works. https://www.prepackpool.co.uk/questions-answers
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The company had pre-existing maintenance contracts that were worth preserving but which would give rise to claims against the company if there were not continued. A sale of the business to a connected party appeared sensible as their company were prepared to offer consideration for the assets including the contracts and this would avoid claims. A senior representative of the purchasing company also provided assistance to the Administrator in collecting book debts due to the insolvent company. Employees’ contracts of employment were also transferred over to the purchasing company, which provided continuity for staff, and reduced claims in the Administration. Once all matters within the administration were dealt with, the company entered voluntary liquidation to allow the Liquidator to collect remaining book debts due to the company, and facilitate a dividend return to the unsecured creditors of the company. This return was estimated to be higher than if the company had been wound up (liquidated), without first entering into administration.