Wednesday, August 22, 2012

How To Pre-Pack Your Small Company Bankruptcy

Companies suffering from financial difficulties are now generally unable to raise alternative finance are often not able to obtain additional funds from their existing bank/financiers, and also refinance may not be commercially viable. Alternatively it may be deemed inappropriate to invest additional money into a 'financial black hole'.

The business may have historical debts that it's unable to service from existing finance or estimated future trading earnings. In such conditions its usual that the business will be experiencing extreme creditor pressure and may have CCJ's and/or the winding up petition against it. The management however, may possibly believe that there is an underlying profitable business or a business that can become profitable through reorganization.

At this time the Directors may feel that they have no option but to get advice on the way the assets of the business could be best protected. With expert and independent advice, it is often possible to save a small business that is going through financial problems, safeguarding jobs, the business and maximising returns to lenders.

We can provide you with the specialist advice that is certainly needed to save the company. This will safeguard the jobs and make sure the Directors still have a business with which they can earn a living from.

This is achieved through a pre packaged sale of the business (more commonly referred to as a pre pack insolvency, a pre pack liquidation or even a pre pack administration) whereby the company and assets of the organization in trouble are sold to some brand-new company (most often setup by the existing Directors) with a price that is deemed to be a fair market value with a valuer or insolvency practitioner.

The funding for the "new co" is arranged in advance, which allows the sale and purchase to happen as soon as the formal insolvency is announced. This keeps disruption towards the business at a minimum. We can help arrange for the funds to be raised for the new company. It's often possible for the assets to be purchased back over deferred terms i. e. 12 monthly payments and we will make sure the best value possible is negotiated with all the insolvency practitioner on your behalf.

Because the sale is being completed by the Administrator, Administrative Receiver or perhaps Liquidator, this ensures that as a director of the company there may be no recrimination upon you regarding the price achieved for the business and assets in the company, it can also be demonstrated through an independent valuation that the price achieved is a fair market price.

To learn more visit: Finance7

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