There are serious questions being raised about pre-packs – the process where a buyer is sought out and negotiated with for a struggling business before it goes into administration (Whittards of Chelsea and The Officers’ Club being two recent examples). Since the 2002 Enterprise Act, these deals have become relatively extensive throughout industry.

The core idea is actually sound in many ways. It allows an administrator to sell a business to a party with resources before that business is badly damaged by negative publicity; this is especially true regarding businesses that have suffered badly with cash flow problems, often on a short term basis. Continue Reading