What is a pre-pack administration?

Pre-pack abuse

Whilst pre-pack administrations have received some adverse press coverage for being open to abuse by unscrupulous company directors, they can be vital in rescuing a business, safeguarding employees and improving the position of suppliers and other creditors because of the minimal disruption and adverse publicity of insolvency. Administrators do not have the same advantage of testing the market for the best possible price for the business and are required to provide a report to creditors (known as a SIP16 report) setting out their rationale for the pre-pack sale as they are ultimately responsible to the general body of all creditors.

For administration order advice, please contact our administration order team at FWJ on 020 7841 0390.