Pre-pack administrations

A pre-packaged administration, or pre-pack, is a sale of a company's business or assets, or both, which has been negotiated and agreed in advance of a company entering administration. Once an administrator is appointed over the company, they will quickly close the sale (often within a few minutes).

Pre-packs are likely to be negotiated and proceed in a short period of time. Agreement is usually reached in confidence. The business is unlikely to have been advertised widely as there may be too much of a risk of key stakeholders disappearing as a result, ie key staff or suppliers.

Sales in pre-pack situations are generally subject to far less due diligence than a standard corporate sale. Warranties, indemnities or guarantees are rarely, if ever, given (as the office-holders will...