Pre Pack Liquidation involves the sale of some or all of a failing company’s assets to a new company. After the sale the old company is closed and the new starts to trade in its place. The new company has the advantage of being debt free.
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The pre-pack process has also become known as Phoenixing. The new company rises “phoenix like” from the ashes of the old failed business and starts trading in its place without the burden of any of the old business debt.
Generally speaking where a small or medium sized business is concerned, after the sale of its assets the old business is liquidated (pre pack liquidation) rather than put into administration (pre pack administration). The reason for this is that generally after the sale of the key assets there is nothing left of the company and liquidation is then only possible option.
Only a brief overview of the Pre Pack solution is given here. For more information about Pre Pack Liquidation see one of our dedicated websites: