The most commonly used product within insolvency services is pre-packaged administration.
The deal is reached pre-appointment with an insolvency practitioner of our recommendation.
This allows a phoenix company to purchase the assets back pre-appointment
in preference to other creditors (with the exception of debenture holders).
Phoenix Company Benefits
phoenix company arises from the ashes of another. This accomplishes the
recovery of a business that has a viable core but is unable to repay
outstanding debts. It is a pragmatic arrangement that protects the
interests of employees and private enterprise.
Advantages of Pre-Pack Administration
- Preserves jobs for Directors & employees;
- Achieves a write-off of debt arrears (not subject to debentures or personal guarantees);
- Releases the business from leases or contracts that may no longer be required;
- Avoids disruption to customers & other stakeholders.
Pre-pack administration provides a planned, swift & secure transition to a
new phoenix company.
- The sale of the business assets & undertaking is agreed in advance;
- The Director’s personal credit history is protected;
- The business may apply to trade under a variation of the original name;
- Minimum disruption occurs and it is possible that some staff and customers may be unaware of the change;
- The existing company could eventually be dissolved by the
as opposed to placing it in liquidation or bankruptcy. This reduces cross-contamination of reputation and credit
- There is no creditor meeting for the liquidation of the old company, requirement for local advertising or filing in the
The alternative recovery method is a Company Voluntary Arrangement (CVA) where the
the existing company proposes reduced payment terms to creditors.