Pre-Pack Liquidation

Pre-Pack Liquidation. Written by John A Waller. Director. Reviewed November 20th,2022.

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?

If your company goes ahead with this process, it will remain insolvent. If the limited company is able to trade out of its financial position, then other insolvency processes need to be taken into account.

So, the company has a model that makes money, though if it doesn’t pay its creditors soon, it might go out of business. Therefore, it might be a good idea to consider a pre-pack liquidation.

Applies when:

Your company’s business model remains strong, with a full order book, but then experiences cash flow problems. EG. Bad debt.

Your business remains profitable, though cash flow then drags it down, 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 using previous names in insolvency. The criteria then have to be adhered to, failing which, you may be subject to fines, limited liability, and even a prison sentence. So when selecting the company name, ensure you take advice from a solicitor, ensuring you comply.

How HBG Advisory May 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 in ensuring the best option for you. If we are pleased with our recommendations, we are appointed liquidators and advise the procedures required to close the old company while opening a brand-new one. Allowing you to move forward with the old debts behind you.

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If you need help understanding the best way forward for your company, we can provide confidential free initial advice. You can book a free virtual meeting or call us on 0800 612 5448..

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