A pre-packaged administration, or pre-pack, is a sale of a company's business or assets, or both, which has been arranged in advance of a company entering administration. The transaction is usually structured as an asset sale so that the buyer only buys the valuable assets/parts of the business, leaving debts, liabilities and unprofitable parts of the business with the company in administration. Often a pre-pack may be the only option open to continue the viable part of a business, particularly when a company does not have the cash or backing to allow for the trading of that business whilst in administration in order to look for a purchaser.
Once the administrator is appointed over the company it will quickly close the sale, so that the company should either not need to incur the costs of trading in administration, or, if it does, this is only the case for a very limited time. Agreement is usually reached in confidence. The business is unlikely to have been advertised widely, if at all, as there may be too much of a risk of key stakeholders
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