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Pre Pack Business Sales
Pre Pack Sale: With the proper advice, in many instances it is possible to have such a pre-packaged sale thereby safeguarding jobs, your future and indeed maximising returns to creditors.
We are experts in business/company rescue
and we can help you whether you are a partner or director.
A pre-packaged sale of the business (or pre pack as they are more commonly referred to) is a process whereby a sale of a floundering company and it's assets is agreed with a pheonix company. A Phoenix is when a new business commences from the failure of a previous business. Phoenix Companies are very often run by some if not all of the same management/directors as were in position in the failing company, and often has a similar name to the business that failed.
Funding for the pheonix company is secured in advance, to enable the sale to be completed immediately after the formal appointment of an Administrative Receiver or Liquidator.
As experienced professionals with back grounds in accounting and banking, we frequently arrange pre pack's on behalf of our clients, where it is evident a refinance is not Businessly viable in the "old company".
Our staff are experienced in all areas of business turnaround, corporate finance and fund raising.
We are not insolvency practitioners! as such our motivation is "rescue" rather than "burial" however as part of the pre pack process do we work in conjunction with a small number of "Businessly aware" insolvency practitioners to achieve the most desirable outcome for our clients.
Our role in arranging pre packs is pivotal, and will include:
- Advising the troubled company of the options available
- Preparation of financial models to ensure that the phoenix company will be viable
- Introduction to an appropriate Insolvency Practitioner
- Formation of the new phoenix company (if required)
- Negotiating an acquisition price with the Insolvency Practitioner
- Sourcing funding for the phoenix company
We call upon the resources of our Business Finance Brokerage, to source innovative funders who are sympathetic to the Pre Pack concept and are aware of the Business necessity to complete the deal quickly.
Crown Preference
On the 15th September 2003 the rights of crown creditors to claim unpaid VAT and unpaid PAYE with "preferential" priority was abolished. There is now a different order of priority as to "who gets what" in any insolvency process.
Debenture holders (usually the bank) rank ahead of unsecured creditors (these now include PAYE and VAT). So if you have personally guaranteed your company bank liability this could be good news, as any purchase of the assets by the phoenix company will be used to reduce the bank debt in the 1st instance, thereby reducing the amount of debt that you will have to settle personally with the bank.
Use of Name
A director or shadow director of the liquidated company should not be involved in the management or formation of the phoenix company without first serving formal notice on all known creditors of the liquidated company.
It is recommended that legal advice is taken in respect of this matter, to prevent the directors of the phoenix company being personally liable for the new company's liabilities.
Sterling Capital Reserve Ltd
Sterling House
10 Wheatcroft Business Park
Landmere Lane, Edwalton
Nottingham NG12 4DG
Tel: 0115 984 9800
Fax: 0115 921 5550
Map and Directions to our Office
