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17 February 2009 | Pre-packed administrations may provide respite to businesses struggling to stay afloat
LEGALISED robbery or the best way to save jobs?
Both descriptions have been attached to the so-called pre-pack administrations used to rescue high street names including Whittard, USC and Officers Club.
Pre-pack administrations – so called because a potential buyer for a struggling company is found before the business is declared insolvent - have become a popular lifeline for failing businesses. By splitting the potentially profitable core of the business from its loss-making parts, the specialist administrators behind pre-pack deals are able to create a new phoenix company from the ashes of the old
Yet according to some critics, pre-packs are simply a way of escaping from debts – leaving suppliers, business partners and landlords in the lurch.
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This article is reproduced from The Manchester Evening News, Tuesday February 10 2009