We detail the nine distinct key stages that have to be followed in a prepack administration
Stage 1: Initial company administration advice meeting
Stage 2: Review information & advice
Stage 3: Arranging valuations and marketing
Stage 4: Sale arrangements
Stage 5: Instruction and arranging the board meeting
Stage 6: Notice of intention to appoint an administrator
Stage 7: Appointment of an administrator
Stage 8: Statement of affairs
Stage 9: Post liquidation assistance & closure
The Administration Process
Stage 1: Initial company administration advice meeting (free)
Timeline: Same day – set up for either the same day for an ‘online meeting’, or a face to face meeting at a time and place to suit you. We’ll need at least one of the company’s directors there to explain the financial situation, after which we’ll give you an initial outline of various options available. We’ll leave you with a list of further information to get together.
Stage 2: Review information & advice (free)
Timeline: usually 1-14 days – we review all the information and advise you on all the available options (not just administration). We’ll provide you with a free quote and our terms of business for review. We talk about how to deal with any company assets (and whether you wish to purchase them), along with any other matters specific to your company, such as leases, personal guarantees or contracts.
Stage 3: Arranging valuations and marketing
Timeline: usually 7-14 days – at this stage, it becomes necessary to obtain a professional valuation of the business and put marketing in place to allow third parties to enter the bidding process. We acknowledge that this information will generally be highly sensitive and any marketing would be blind in order to preserve the value of the business. Any interested parties would be required to sign binding confidentiality agreements.
Any offers for the business will usually be dealt with by way of a sealed bids process. If you have submitted the highest bid to buy back the business then there are some additional steps you will need to take to set up the sale.
Stage 4: Sale arrangements
Timeline: usually 3-5 days – in order to a pre-packaged sale to take place to you as a connected party, the insolvency practitioner will recommend that you obtain an opinion from the Pre-pack Pool and prepare a viability statements for the new business for the next 12 months. The contents of these statements or in the alternative a note that you declined to take these actions will then be disclosed to creditors.
As a rule, we would always recommend taking this action as it lends credibility to the transaction. More information about from the pre-pack pool works can be found here.
Once both of these has been provided a sale agreement will be drawn up between the insolvency practitioner’s solicitor and your own solicitor ready to be completed once the company has been placed into administration.
Stage 5: Instruction and arranging the board meeting
Timeline: usually 1-3 days – if you would like to go ahead, and you have agreed to our terms, you formally instruct us to assist in placing the company into administration. We will arrange a board meeting to take place to arrange the requisite authorities to allow a designated board member to sign the administration documents. Note that where a pre-pack sale is taking place stages 5-7 will generally run parallel to stages 3 and 4.
Stage 6: Notice of intention to appoint an administrator
Timeline: 5 business days – if the company has a qualifying floating charge holder registered at Companies House, advance notice of the administration must be given to them. The designated board member will need to visit their solicitor to provide a statutory declaration on the document. We will then arrange for this to be filed in court and served on any charge holder.
Stage 7: Appointment of an administrator
Timeline: Immediate – once the notice period has expired or if the charge holder has consented the notice of appointment can be prepared and filed in court. Again we will prepare this document where the designated member will need to visit their solicitor for a further statutory declaration. We will again arrange for the document to be filed in court. Once this is done the company is officially in administration.
Stage 8: Statement of affairs
Timeline: 11 business days – once the company is in administration, the administrator will generally require you to provide a statement of affairs, detailing the company’s assets and liabilities. This is something you can often prepare with the assistance of your accountant. In order to assist the process, we can liaise directly with your accountant in relation to the requirements of the statement.
Once it is completed you will need to sign off on its contents and we will then provide a copy to companies house and creditors. However, where there has been a pre-pack sale the administrator may advise that no statement of affairs needs to be delivered up.
Stage 9: Post liquidation assistance & closure
Timeline: usually 9-12 months – we work with you to ensure that the company’s books and records are moved to the administrator’s office and that any remaining assets are properly realised. Each director is required to complete a questionnaire and once we are happy that there are no outstanding matters, we will either apply for the dissolution of the company or move into liquidation to allow for a distribution to unsecured creditors.
Either way, the administration will come to an automatic end after a year.