For both politicians and the media, pre-packaged sales of businesses out of administration (or “pre-packs”) are often highly controversial, particularly when the sales are back to the directors or management of the failed enterprise. There is a perception that pre-packs are often abused by unscrupulous directors to simply “dump debts” and start afresh free of troublesome liabilities, and all for far less than the true value of the business.
My biggest customer’s gone bust owing me a lot of money. Now my business can’t meet its own debts and the taxman’s threatening to wind the company up. The business is sound but can’t carry on with its existing liabilities. It needs a clean break and a fresh start. I’ve heard about “pre-packs”. What are they all about?