What is pre-pack administration good for?
An administration procedure effectively stops an out of control train in its tracks.
A pre-pack administration helps the train continue on its journey smoothly without having to stop.
Administration can be used to:
- Avoid the compulsory winding up / liquidation of a company and cessation of trade.
- Maximise realisations
- Rescue part or whole of the business, including protecting employee jobs.
In addition to the above, the benefits of a pre-pack administration:
- Helps retain the maximum goodwill before the administration takes place and becomes public.
- Saves on potential substantial costs that could be incurred during the normal administration where the administrators usually trade a business post appointment in order to sell part or the whole of a business on a going concern basis.
- The business can be transferred almost seamlessly ensuring a continuity of trade.
- It helps to preserve customer and employee confidence.
- It can be very effective for a business whose value is mainly in its goodwill e.g. a legal practice, advertising agency or high tech businesses.
- A pre-pack can happen very, very quickly.