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Members :: Attwaters Solicitors

BNI Member Attwaters Solicitors
  • Buy and selling businesses
  • Buy sell and lease premises
  • Prepare or review contracts
  • Advice on business organisation
  • Advice on business financing

Business Lawyers covering all legal business needs

A legal firm offering a full range of legal services including specific advice for businesses. More than 30 lawyers covering all aspects of law.

Attwaters Solicitors - News


In Harlow, Epping, Loughton

Starting up in Business? Taking a new direction? Selling your business?

 We have put together a team of independent professionals to guide you to success.

The Business Professionals can ensure that your business is structured for profit by:

-  Minimising your tax.

-  Keeping you abreast of your regulatory requirements.

-  Ensuring appropriate and sensible insurance.

-  Providing business finance advice.

-  Reviewing your business plan to maximise profit.

With this help you can ensure that your business infrastructure is correctly positioned so that your most valuable business asset, your expertise, is what you concentrate on.


Call Jonathan Clarke on 01279 638808


Latest Post

Rising from the Ashes

08th April 2014

Post Type: New Member Article

Rising from the ashes

We have all probably faced the situation of discovering that a company with which we have been trading has mysteriously apparently gone off the face of the earth only to reappear after a few days in a slightly different guise.  The end result is for instance that the old company owes us money which does not get paid, but then appears to go on trading whilst ignoring previous liabilities.  More than a handful of clients then come us
and ask how this magical process has been achieved.  They want to know is it legal.  They rather hope that it is not. 

In the trade this is known as a pre-pack.  It arises when a company goes into
administration.  It is the unsecured
creditors who are at risk.  It deserves

What is a pre-pack?

A pre-pack is the name given to an arrangement under
which the sale of all or part of a company’s business or assets is negotiated
with a purchaser before the
appointment of an administrator. The sale is completed by the administrator
shortly after their appointment. This reverses the standard process, where the
administrators start marketing the business after they have been appointed. The
purchaser may be a competitor or, as is often the case, the existing management

What are the advantages of a pre-pack?

  • The main advantage of the pre-pack process is the speed with which it can be concluded. For example:
  • the costs of the administration process can be reduced, which can result in a better return for creditors;
  • key staff can be retained because they do not have the time to seek alternative employment;
  • more jobs may be saved than in a normal administration process;
  • if stock has a limited shelf life, there is more scope for it to be sold at full
    value; and
  • adverse publicity, media speculation or damage to the goodwill of the business may be reduced.
  • Some unsecured creditors, such as suppliers, may be engaged by the new business.

  • Often there is no other option. The alternative would be liquidation and the immediate cessation of the company’s business.

What are the disadvantages of a


of transparency

Pre-pack arrangements are generally made quickly and in
private, albeit with the co-operation of secured creditors. Unsecured creditors
are often unaware that a pre-pack is going to happen, so they do not have the
opportunity to protect their interests by considering and voting on the
pre-pack proposal.


of accountability

Administrators involved in
pre-packs do not have to obtain prior approval for their actions from the court
or creditors in the same way as they do in a normal administration. There are
no specific regulations which deal with pre-packs, which can lead to a lack of
confidence in the openness of the procedure.

do not maximise returns for unsecured creditors

A pre-pack sale of a business is often conducted with
limited marketing compared with a normal administration. It is therefore
impossible for the proposed administrator to test the market fully because of
the risk of the company’s financial difficulties being leaked. Consequently,
the assets of the company may be sold at an undervalued price or the goodwill
of the business may not be valued accurately because of the speed of the sale.

liabilities using a pre-pack is a short-term fix

A pre-pack doesn’t subject the company to a
restructuring, which is often necessary if the business is to survive in the
longer term. It is debatable whether a business that has already failed will do
any better under the control of the same management team.

are similar to the outlawed practice of creating “phoenix” companies

Creditors tend to be suspicious of pre-packs when the
business is sold back to the original owners. Under the pre-pack guidelines,
administrators have to disclose to creditors the name of the buyer and whether
there is any connection between the buyer and the company. There are concerns
that there is the potential for abuse of the process by directors seeking to
purchase the business at an advantageous price and simply avoiding paying

Issues for directors of a pre-packed

  • The directors of
         a company who are involved in a pre-pack need to make sure that they do
         everything they can do to minimise loss to creditors. Directors should
         take independent legal advice, especially if they acquire an interest in
         the company’s business and assets through the pre-pack.

  • The Insolvency Service has indicated that it will use its enforcement powers to penalise any directors who misuse the administration process to seek to gain a benefit themselves.

Contact Attwaters Solicitors