Pre-pack administration is a business rescue process in the UK that allows a company in financial distress to sell its assets before entering formal administration. The sale is pre-arranged with a buyer, often the company’s existing directors, management team, or a third party.
This process ensures minimal disruption and allows the business to continue operating under a new entity.
1️⃣ Appoint an Insolvency Practitioner (IP) – The company works with an IP to assess financial options and arrange the sale.
2️⃣ Identify a Buyer – The business assets are valued, and a buyer (often existing directors or a third party) is lined up.
3️⃣ Agree on the Sale Terms – The terms of sale are negotiated and agreed upon before formal administration begins.
4️⃣ Enter Administration – The company is placed into administration, and the pre-agreed sale is completed.
5️⃣ Continue Trading Under a New Entity – The business assets are transferred to the new entity, which continues operations under a fresh structure.
