Restarting an Insolvent Company.
A pre-pack administration, sometimes referred to as ‘phoenixing’, is a formal and legal process whereby an insolvent company sells its business and assets, at market value, to a new company. The new purchasing company may be made up of the same directors as the old, insolvent company.
Is this illegal?
No, this is a perfectly legal arrangement, as long as the company was genuinely insolvent before the process was started. The alternative to a pre-pack administration could well be company liquidation, which would bring with it the loss of jobs.
Repeated pre-pack administrations involving the same directors are likely to attract the attention of HMRC who would investigate if this was a tactic to simply avoid paying tax liabilities and other debts.
How can McAlister & Co help if I want to re-start my company without the debt?
As licensed Insolvency Practitioners, McAlister & Co are experienced at making all of the necessary arrangements for pre-pack administrations. We can provide all of the necessary documentation and can help you to navigate through the potential minefield of regulations to restart the company as a profitable enterprise and save jobs.
