Pre-pack liquidation implies a newly-formed company ( a phoenix) which then purchases the assets of an existing company, which then,enters liquidation.
When do you use a pre-pack liquidation?
To consider this process, your company remains insolvent. If the limited company can, however, trade out of its financial position, then other insolvency processes require consideration.
So, the company maintains a profitable model, though pressure then from creditors endangers its survival, therefore, a pre-pack liquidation should be considered.
Your company business model remains strong, with a good order book but then experiences cash flow problems. EG. Bad debt.
- Past bad debts, therefore, affecting cash flow.
- Creditor pressure threatening bailiffs or other court action.
Your business remains profitable, though cash flow then drags it down and making it potentially a prime candidate for a pre-pack liquidation. PRE-PACK-LIQUIDATION
CAN THE PREVIOUS COMPANY NAME BE USED?
In some situations, you can then use the name or similar. Regulations control the use of previous names in insolvency. The criteria then have to be adhered to, failing which, you may then be subject to fines, the protection of limited liability and even a prison sentence. So when selecting the company name, ensure you, therefore, take advice from a solicitor, ensuring you comply.
HOW HBG ADVISORY HELP
To commence a pre-pack liquidation, we need to meet with you over a virtual meeting (Ensuring safety and confidentiality). We will then detail in plain English the process involved ensuring the best option for you. If happy with our recommendations, then we proceed to be appointed liquidators and advise the procedures required to close the old company while opening a brand new company. Allowing you to move forward with the old debts behind you.
For further help, contact HBG Advisory on 0800 612 5448 open 8 am to 8 pm seven days a week.