Oh dear. I found this on t'internet:
"So what is a pre pack administration sale?
restart using a pre pack administrationIn the UK, a pre pack administration sale is a powerful, legal way of selling the business on to a trade buyer or a third party. Or to the existing directors operating under a new company (or "newco") if the business is facing serious problems and creditor threats.
If a winding up petition is threatened, this can be a powerful solution. Don't wait until a winding up petition is issued through, because pre-pack is not permitted after it has been issued.
The main advantage of prepack administration is the continuity of the "business". When the plan is ready and a contract of purchase is drawn up, the company is quickly protected by the Court - allowing the administrator to sell the "business and assets".
This gets rid of debts, unwanted or onerous contracts, and possibly some employees (although in most circumstances there could be TUPE issues that need to be addressed) and there can be no interruption to the business, which in itself can destroy value.
Another big advantage is that the cost of the process is lower than trading administration, as the administrators do not need to find funding to trade the business. The process, including the preliminary marketing, professional valuation work and discussions with creditors, can be very quick and done in a few days if necessary.
If the business is to be sold to a connected party, i.e. the former directors, they will need to be able to fund the acquisition of the assets. There are specialist funders who can help with this, call Keith Steven on 07974 086779 for guidance. The business and the assets will need to be independently valued to avoid problems of under valuing assets.
Of course, a pre pack can generate negative publicity if the former directors are seen to be shedding liabilities. However, it should be remembered that the business was already insolvent prior to any appointment and a protracted process ending in liquidation could have been the alternative - possibly with the loss of many more jobs."
