Administration/Pre-Pack
Often saving a company requires already connected parties to change the structure of the company buying back the profitable assets and liquidating the balance.
This is often achieved by a "Prepack" where the restructuring is completed swiftly according to a devised strategy. It is essential that a professional valuation is obtained that can be relied upon otherwise the transaction is likely be challenged by the creditors.
So called “PrePack” administrations are an easy target for accusations of wrongdoing and transactions at an under value. In reality Insolvency Professionals are aware of the pitfalls and will call on the services of an independent expert valuer. AMCO ensures that all asset transactions are reasonable to enter into and are at fair value.
The rational of a “PrePack” is to enable an Insolvency Practitioner to obtain better value than in a forced insolvency. In a “PrePack” the company enters administration and is sold at a pre-agreed price to a preferred buyer.
What is required is a “Real World” Valuation given the company was to be sold in a distressed state versus what could be achieved given a three month sales period in the open market.
The buyer in a “PrePack” needs to offer fair value. Unless there were exceptional circumstances this would, by necessity, be more than the sum of its parts if sold piecemeal. An experienced valuer would take into account liabilities taken over, including “TUPE” and any action that would benefit all the creditors.
Most often PrePack administrations have to be constructed swiftly and
AMCO understands this process. AMCO are able to move quickly
to get an understanding of the assets and produce a workable valuation
quickly.