The term may sound as though it involves nothing more momentous than a weekend trip to Ikea, but pre-packaged administrations have become one of the most controversial topics in UK business. Nick Huber reports.
Pre-packs – when a sale of a business and its assets are agreed before it enters insolvency proceedings, allowing a sale within days – have been widely used since the financial crisis started in 2008. In 2011, about one quarter of all administrations were pre-packs, of which around 85% are sold to parties already linked to the company (normally directors), according to Insolvency Service figures cited by the Turnaround Management Association. Examples of big pre-pack deals include bed retailer Dreams, JJB Sports and stockbroker Seymour Pierce.
Critics claim that pre-packs often...
About Nick Huber
I’m a specialist business journalist and have a particular interest in tax and technology.