Pre-pack administration

What is a Pre-Pack Administration?

A Pre-Pack Administration is a formal insolvency procedure under the Insolvency Act 1986 where a company that is unable to pay its debts is placed into administration, and the sale of its business and assets is arranged in advance of the administration taking effect.

Once in administration, a Licensed Insolvency Practitioner is appointed as Administrator. Their statutory duty is to act in the interests of the company’s creditors as a whole, realise value from the business and its assets, and ensure the process is conducted in accordance with insolvency law and regulatory requirements. This may include reviewing the company’s financial position and the conduct of directors where appropriate.

At Insolvency Expert, our role is different. We do not act as the Administrator. Instead, we work exclusively for you — the directors, shareholders, and business owners. Our focus is to support and represent your interests, provide clear and independent advice, and guide you through your available options so you can make informed decisions.

In a pre-pack administration scenario, the business and its assets may be sold to a new company, often referred to as a “newco”, which can allow the underlying business to continue trading without the burden of historic unsecured debts, subject to legal process, independent valuation, and creditor scrutiny.

Where appropriate and feasible, this process can help preserve business continuity, protect jobs through TUPE (Transfer of Undertakings Protection of Employment), and allow the viable parts of the business to continue operating in a more stable financial structure. The aim is to support the preservation of business value, maintain trading where possible, and provide a structured solution that is compliant with insolvency legislation while enabling a stronger financial foundation moving forward.