Business and Asset Sales in Insolvency Situations

When entering into a purchase or sale of an insolvent business/assets, it is essential to obtain legal advice in relation to the effects of the sale and contractual documentation as there are numerous factors to consider.

Pre-Packs

Pre-pack is the term commonly given to a sale of the business and assets of a company (usually in administration) where the terms of the sale are agreed prior to the appointment of the insolvency practitioner. This process is completed either immediately after appointment or within a very short time frame thereafter.

The government has recently reviewed the operation of pre-packs and introduced some new regulations, taking effect from 30 April 2021.  From this date, a pre-pack or sale to a connected party within the first 8 weeks of the appointment of an administrator requires either the approval of the creditors or a report obtained from an Evaluator.

The Restructuring, Turnaround & Insolvency Team act frequently in relation to such sales, whether on behalf of the insolvency practitioner and company in administration, a potential purchaser, landlord, creditors or employees. We are always willing to talk an issue through to determine if we can assist.