Pre Pack Business Sales

With proper advice in many instances it is possible to have such a pre-packaged sale thereby safeguarding jobs, your future and indeed maximising returns to creditors.

A pre-packaged sale of the business (or pre pack as they are more commonly referred to) is a process whereby a sale of the business and assets of the floundering company is agreed with a pheonix company. Often this is set up amd managed by the existing directors and/or management team, prior to the appointment of an Administrative Receiver or Liquidator.

Funding for the pheonix company is secured in advance, to enable the sale to be completed immediately after the formal appointment of an Administrative Receiver or Liquidator.

We frequently arrange pre pack's on behalf of our clients, where it is evident a refinance is not commercially viable in the "old company".

Our staff are experienced in most areas of business turnaround, corporate finance and fund raising.

We are not insolvency practitioners! as such our motivation is "rescue" rather than "burial" however as part of the pre pack process do we work in conjunction with a small number of "commercially aware" insolvency practitioners to achieve the most desirable outcome for our clients.

Our role in arranging pre packs is pivotal, and will include:

• Advising the troubled company of the options available
• Preparation of financial models to ensure that the phoenix company will be viable
• Introduction to an appropriate Insolvency Practitioner
• Formation of the new phoenix company (if required)
• Negotiating an acquisition price with the Insolvency Practitioner
• Sourcing funding for the phoenix company

We call upon the resources of our Commercial Finance Brokerage, to source innovative funders who are sympathetic to the Pre Pack concept and are aware of the commercial necessity to complete the deal quickly.

Crown Preference

On the 15th September 2003 the rights of crown creditors to claim unpaid VAT and unpaid PAYE with "preferential" priority was abolished. There is now a different order of priority as to "who gets what" in any insolvency process.

Debenture holders (usually the bank) rank ahead of unsecured creditors (these now include PAYE and VAT) . So if you have personally guaranteed your company bank liability this could be good news, as any purchase of the assets by the phoenix company will be used to reduce the bank debt in the 1st instance and thereby reduce the amount of debt that you will have to settle personally with the bank.

Use of Name

A director or shadow director of the liquidated company should not be involved in the management or formation of the phoenix company without first serving formal notice on all known creditors of the liquidated company.

It is recommended that legal advice is taken in respect of this matter, to prevent the directors of the phoenix company being personally liable for the new companys liabilities.

VISIT US - 18th - 20th MARCH 2012

© 2011 : Sterling Capital Reserve Ltd Sterling Capital Reserve Ltd Sterling House, 10 Wheatcroft Business Park, Landmere Lane, Edwalton, Nottingham NG12 4DG Tel: 0115 984 9800 Fax: 0115 921 5550 Map and Directions to our Office

ANY PROPERTY USED AS SECURITY, INCLUDING YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
EARLY REPAYMENT CHARGES APPLY. A BROKER FEE MAY APPLY.

Web Design Nottingham by Whatever Enterprises