How the pre-pack administration process can save your business

Pre-pack administration is often viewed by business leaders and their advisors as a last resort, to be avoided at all costs. While nobody sets out to fail in business, running into difficulty in today’s economic climate is a genuine problem for many companies.


However, entering into administration and the pre-pack administration process should not be viewed as the end of the line for your business. With the right insolvency practitioners providing accurate and logical advice, it is possible to save your business via a pre-pack.


Using a pre-pack


The recent case involving Metalrax Housewares Limited, the engineering company, which has just been sold to Oneida International Limited, a subsidiary of Everyware Global Inc, saving 120 jobs in the process is a good example of how pre-pack administration can work to save your business.


This recent example echoes countless pre-pack administration cases that Moorfields have undertaken over the years. For example, our partners were appointed as administrators of CopperEye, an enterprise data management solutions business with offices in Bristol, UK and Boston, USA in 2011.


The company had a turnover of £1.4m and over 100 filed patents around the core business tool. The tool in question offered a data management solution that provides SQL query access to the log files of business transaction data stored in flat files.


Moorfields were instructed by the directors to find a purchaser for the business and secure a sale within a limited-time frame of three weeks, which we did. We used a pre pack administration sale to complete quickly, securing jobs and ongoing services for customers.


Pre pack administration: what business leaders need to know 


The sale of a business and its assets under a pre-pack normally sees the business sold as an ongoing concern – one that is expected to continue trading - the transaction may involve some or all of a company’s assets.


Pre-pack administration and employees


A pre-pack will often see the transfer of existing employees to the purchaser via the application of The Transfer of Undertakings (Protection of Employment) Regulations (SI 2006/246), so protecting the accrued rights of the employees and their jobs.


If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1143.

View all Business Insights