Please visit http://www.companyrescue.co.uk/ for confidential help and insolvency advice or email keiths@ksagroup.co.uk

Monday, 30 September 2013

David Price Food Service goes into administration

Motor Transport  have reported that David Price Food Services, the Tyne and Wear based Haulier business has gone into administration just over a year after entering a Company Voluntary Arrangement (CVA).   The chilled haulage division has closed but the cold storage section has been sold to the Ice Company Distribution business and 29 jobs have been saved.

Its haulage operations were based  in Bristol, Bury St Edmunds, Glasgow, Gillingham, Wrexham and South Kirby in Yorkshire.

KPMG’s restructuring practice proposed the CVA but have now been appointed as joint administrators. They stated the collapse of the operator was due to a period of poor trading and an increased cost base, primarily due to rising fuel and utilities costs.  KPMG's deal was for the creditors to get back 38p in the £1 and it would appear that the recent poor trading made this business unviable.  KPMG have lots of experience ( like us of course) in CVAs and they don't always work as no one can predict the future.  The business was already stressed but it looks like they have tried to keep trading rather than throwing in the towel right away.

David Price Foods had a turnover of £13.9m in 2012 with a pre-tax loss of £979,804.


Keith Steven writes in the Business Turnaround Supplement of the Sunday Telegraph

Keith Steven writes in the Business Turnaround Supplement of  the Sunday Telegraph offering advice to the struggling lawyers.  Below is a scan from the paper.



If you cant read it - here is the text.

The legal sector is in trouble. The introduction of the Legal Services Act has led to the option of forming alternative business structures (ABSes), meaning a number of distressed firms with failing businesses may be snapped up by larger players.

But as is customary in any marketplace, whenever you see consolidation, you also see failure. Businesses close down, other companies purchase distressed assets and a consensus between stakeholders is rarely reached. If the Solicitors Regulation Authority (SRA) thinks a firm is a risk to the clients, then it may instantly intervene. “Effectively the business dies there and then,” says Keith Steven, managing director of KSA Group.

“To put a company into liquidation takes three weeks, but the SRA can intervene in a flash – if they’re ready to go, they can be there “today”. In most cases, the SRA will give prior warning by writing to distressed firms requiring the management to seek external insolvency advice. But often if it gets to this stage, it’s already too late.

“Smart lawyers should be thinking about turnaround options that are available before it’s imposed upon them by the SRA,” explains Steven. “The aim should be, even before the SRA gets them on its watch list, to get advice before insolvency options are required.”


Common warning signs such as poor cashflow, falling sales or not being able to meet payments to HMRC should be taken seriously by partners and directors. Struggling with PAYE and VAT payments are indicators that management must act. “A new pair of eyes coming in can spot the issues,” explains Steven.

“The reason management doesn’t address structural business problems is fear of change. But change has been forced upon them by the market and smart directors must act to turnaround the business.” The KSA Group offers a variety of solutions including plans “A”, “B” and “C” to the distressed firm, and works with it and the SRA to prevent regulatory intervention.
Plan “A“ can be used while it’s still possible to defer creditor payments, restructure bank debts, chase debtors, cut costs and turn the business around.

If creditors choose to reject this informal deal, then Plan “B”, may be used, this is often a formal Voluntary Arrangement (CVA or PVA) to pay creditors over a fixed period while continuing to trade. Debts are substantially discounted on the way through. If it gets to the stage where it is impossible to turn the business around, that may mean plan “C”, when a break-up sale to buyers or a prepack administration becomes necessary. “That’s not desirable for all parties, but it can sometimes be the only outcome” said Steven.

The KSA Group also offers a free online guide at www.companyrescue.co.uk which has served as a crucial aid for companies feeling the pressure of a tough economic climate, with thousands still trading with its help.

020 7877 0050
www.ksagroup.co.uk/help-for-lawyers

WAE+ Customers angered by new firms inability to fulfill orders

Last week we blogged that WAE+ had undergone a pre pack administration to a couple of its existing employees and that many customers had complained about not getting their orders.  Well, in a recent development the new firm  created, JM-limited.co.uk, has said that it is unable to meet or is legally required to fulfill any of the existing orders of the previous firm.    This has angered customers who are demanding action against rogue internet operators.  Advice is that you should buy with a credit card but the problem is that only purchases over £100 are covered so the protection is not as much as many believe.  With many more operators online this is becoming more and more of an issue.

The online retailer attracted hundreds of complaints from dissatisfied customers but despite this it announced a trebling of its sales which showed stellar performance by increasing to £4.48m compared to £1.4m in the previous six months.

Citizens Advice confirmed that online shoppers only have a contract when a good is dispatched, though are entitled to a refund within 30 days if it never arrives.

The firm said following record Christmas sales figures it had continued to build on its success and was now averaging over 6,500 customer orders per month.

The Sunday Telegraph did an investigation and found that amid growing fury and calls for action from shoppers, WAE+'s two directors Darren Cresswell and Ben Slater put the company into administration on September 2. The business and assets were immediately sold to two of the 14 employees at the Birmingham-based company, who paid a "significantly higher" price than expected.


So what happened?

We will have to wait to see the administration report but it sounds like the usual rapid growth story where the company has run out of cash trying to fulfill orders that are coming in thick and fast.  Perhaps financial controls were not adequate. Either way when companies are growing fast this can be a difficult time to manage cash flow.  Download our daily cashflow spreadsheet to help you avoid cashflow problems.

Friday, 27 September 2013

Insolvency rules under review by the Insolvency Service

Proposals to simplify and reorder existing Insolvency Rules and replace them with a single set of rules were announced in a consultation document published by the Insolvency Service yesterday
.
The new rules bring together 24 Statutory Instruments. They also make common provision for processes, such as meetings of creditors, that apply across different insolvency procedures, to make it easier for users.

The new rules will also include written information requirements to make it easier to use electronic submission rather than relying on statutory forms. This will result in a more logical structure to improve clarity and consistency.

The consultation – modernisation of rules relating to insolvency law, which closes on 24 January 2014, is aimed at insolvency practitioners, judges, lawyers and people involved in insolvency issues, e.g. creditors and debtors. It follows feedback from users who wanted a more streamlined structure free of archaic and often impenetrable language.

The current rules have been in force since 1986 and provide a framework for the Insolvency Act 1986, setting out requirements for the majority of insolvency procedures.

The draft rules anticipate some of the policy changes from the Government-wide Red Tape Challenge proposals announced in July 2013, including proposals to change the need for creditor meetings and contact.

The proposals include:

Structural changes:
Creating a single set of rules.
Reordering the rules on more logical and clearer lines.

Content changes:
Using plain English and improving consistency to make the rules easier to understand, and to improve consistency across insolvency procedures.
Making it easier for documents to be delivered by electronic means.
Removing shareholders and those under a duty to contribute to unpaid share capital – contributories - from the list of people who can be appointed to a liquidation committee.

Commenting on the proposed changes, Deputy Chief Executive Graham Horne, said:

“We have listened to our stakeholders and want to modernise the Insolvency Rules so that they are easier to understand and apply. This consultation is a great opportunity for people who use the Rules to help us ensure they are fit for modern needs.”

Collectables in administration

Its that time of year again when the quarter's rent is due and it looks like a couple of larger retailers are feeling the pressure.

Collectables, the gift retailer which has 11 stores and employs 200 staff, has entered administration
administrators at KPMG have been appointed.  The firm has retail units across the North East.  So far the administrators have made 25 people redundant in the head office and closed the shops.  However the staff at the shops have not been made redundant as yet as the administrators have said the situation is "uncertain"

Jonny Marston at KPMG said: "Sustained difficult trading conditions have resulted in the business facing cash pressures with a further increased demand for working capital in preparation for the Christmas trading period.

So this looks a bit like a cash crunch, maybe creditors being very aggressive but there is a possibility of extra funding very close.  Normally in these situations it would pay to file a notice of intention to appoint an administrator to stop legal actions.  However it would appear that in this instance stopping trading immediately was a priority to avoid the situation for creditors getting worse or possible accusations of wrongful trading.  Without knowing the full situation this is really just speculation.  The looming rent bill of course was a crucial factor.  KPMG are very rescue minded having done several high profile CVAs so it will be interesting to see what the outcome is.

The administrators said; "We are now assessing the company’s financial position and the options available, whilst marketing the business and assets for sale."

The company operates from 13 leasehold stores and owns a freehold store in Alnwick.  It was founded when Philip Lewis began trading small collectable gifts from a barrow in the Metro Centre in Gateshead.

If you are a retailer based in the North East please do not hesitate to contact our Gateshead office where Eric Walls and the team can offer advice on all the options.

If you are a worried employee then please refer to our help for employees pages at  http://www.companyrescue.co.uk/company-rescue/guides/redundant-employee

Wednesday, 25 September 2013

Everyone likes something for free number 2!

In addition to our free cashflow spreadsheet today we are giving away our free directors toolkit, guides, cash-flow forecasts, how to do deals with HMRC

All FREE click here

Free daily cashflow spreadsheet for directors

Everyone likes to get something for free! You don't get many handouts in business, so today we are giving away our free daily cash-flow forecasting spreadsheet for SME company directors!


Click here for your copy, no need to register or tell us who you are! Just click and download.

Tomorrow there will be more free offers so watch this space!

KSA Group provides a wealth of free information for businesses via our website at http://www.companyrescue.co.uk

Monday, 23 September 2013

KSA Group Insolvency Notice

Sparpunkten Limited Liquidation Notice

Meeting of the Creditors of the above named company will be held at the offices of KSA Group Ltd, Tower 42, Level 7, 25 Old Broad Street, London, EC2N 1HN on 4 October 2013 at 1.15 pm

See the full notice below

http://www.companyrescue.co.uk/insolvency-notices/sparpunkten-limited-s98-liquidation-notice

Caught in the act: The rise of unlawful phoenix companies


There is a lot of controversy surrounding the idea of “phoenix companies” and creditors can often feel aggrieved to find someone who owed them money trading again without significant consequences.

To start a new company doing the same type of business following a liquidation the directors need to fulfill certain requirements; those who don’t, run the risk of committing a criminal offence.

One of the main causes for this is when a limited company is put through liquidation and a director of that business continues to trade under a name which is either similar or identical. This is prohibited under Section 216 (2) of the Insolvency Act, where it states:

 
For the purposes of this section, a name is a prohibited name in relation to such a person if-
        (a)  It is a name by which the liquidating company was known at any time in that period of 12 months, or
        (b)  It is a name so similar to a name falling within paragraph (a) as to suggest an association with that company

Whilst it is clearly stated that such an act is illegal, the number of phoenix companies taken action upon has doubled in the last year. In the financial year of 2011/2012, the Insolvency Service took action in 85 cases. However in the financial year of 2012/2013 this had risen to 163 cases.

Many people believe that they can simply offload their debts by starting up a new business under a similar name; don’t fall into the same trap. If you wish to continue in business following your company’s  liquidation then it is very important to take advice.  Section 216 is a legal minefield so please call us if you have any questions.

Friday, 20 September 2013

Castle Kitchens in Liquidation

Castle Kitchens, with a long history in Plymouth going back to Victorian times, it to be placed in liquidation on the 1st of October.  The company used to break up wooden ships for recycling but diversified into kitchens in 1955.  The business was bought in 2004 by the former directors of the Clay mining firm WBB.

Michelle Weir, a partner at Lameys, the insolvency practitioner appointed to the case said: "The company has been a victim of the effects of the recession which has seen the sales of luxury items like kitchens reduce dramatically.  "The severe effects of recession over the past four to five years have taken their toll on the business which has led to its demise."

The c. 18,000sq ft building that Castle Kitchens occupied, which also contained a warehouse section, has been put up for sale at £720k or it can be rented for £75k.

So what actually happens in a liquidation?

Have a look at our flowchart of the whole process




Wednesday, 18 September 2013

Construction Businesses Feel Cost Pressures

What a difference a few months make.

Back in May we blogged "Construction output in the UK shrank by 2.4 per cent in Q1 of 2013, falling to its lowest level since 1998."  



  • Now in Q2 the construction sector has seen a 20% increase in orders over the Q1.  
  • Atkins have announced that they are taking on 400 graduates and apprentices this year which is the most in its 75 year history
  • Plans for a "Gotham City" style of buildings is going to planners for Leadenhall Market in the City.  This will be a £400m project
  • Bricklayers are now able to command salaries of £40k+ a year
  • Bricks and breeze blocks are having to be sourced abroad as suppliers cannot meet demand.
  • Reservation rates on new homes reported by Crest Nicholson is up 46% on the same period last year.
  • Other builders say they can't build fast enough!

So this is some turnaround!  Construction is always very cyclical and can be slow to match demand but this is good news for the economy and will feed through into the GDP figures as we near the, Ahem... Election.  

For some smaller construction companies rising costs can be a complete nightmare as they may be finishing off jobs on fixed quotes and not been paid on new jobs taken on.  There could be a bit of cash crunch.  In fact our regional manager George Davis has been to see a few such companies recently.

No matter where you are based and want one our regional managers like George to visit you then call our freephone number on 0800 9700593.  A cash flow problem does not necessarily mean the end of the business!  Call for advice.

Tuesday, 17 September 2013

Coggles to close stores and expand online

York-based Coggles that went into administration in May of this year will expand online following its purchase by Hut Group. The group has now announced its plans to turn the business around by "doubling or even trebling" the size by moving more online and closing its outlets.

Steve Whitehead, Hut's commercial director, told the Yorkshire Post: “We can't change autumn/winter 2013, but we've ordered the products for spring/summer 2014 so we expect more of an impact next year.

“I really see a big step up for Coggles. We're looking to double or treble the size of the Coggles site. We want to enhance the Coggles brand. It's so strong it has won every draper's award going.”

He added that Coggles and The Hut Group share a similar approach to fashion, explaining that the companies have both generally avoided high fashion and focused on high-end brands instead, selling items that people will come back for more than once. “It's about very strong lifestyle products, not brands that come and go,” he noted.

The new owner's change in approach to the management and development of Coggles looks set to help bring the brand back to health.

Monday, 16 September 2013

Rent quarter day looms for retailers

Landlords are preparing to issue their invoices for the September rent quarter day (29th September) and this is often a crunch time for retailers.  However, there have been some tentative signs of recovery on the High Street in terms of overall sales, up 3.6% compared to August 2012, but this was not enough for Dwell which was last major High Street retailer to go into administration. In addition the vacancy rate of shops in the UK averages around 14%


Quarterly rent may be enshrined in the lease agreement but many landlords are open to negotiation and are often willing to accept monthly rental payments with little or no penalties.  They are most likely to have the right to ask for interest on the overdue rent as per the lease but this might make the difference between the business surviving or not.

It is not just retailers that are affected but anyone whose business depends heavily on their property -   Retailers rents are normally a higher proportion of their overheads than other businesses hence they are more vulnerable.

If as a business you feel that your rent is overstretching you then it may be possible to ask for a rent concession.  This is more common practice in shopping centres where the landlord owns the whole centre and helping one retailer indirectly helps the others.   The last thing a landlord wants is empty shops which will detract from the centre as a whole.  If you do ask for a concession make sure you have up to date accounts and proof of your difficulties.

If you are a retailer or operator with a high rent bill then look critically at stores or premises that are under performing and it may be that you can vacate these premises if you enter into a CVA.  Read our retailer rescue pages for up to date information.

WAE+ is sold in a pre pack administration

According to reports, online retailer WAE+ is under new ownership after the company went into administration.  Their site is currently "undergoing maintenance"

It is understood that the business was sold in a pre pack administration to existing employees Justina Richards and Mevish Aslam who have set up JM-Limited.co.uk Ltd.

The online retailer attracted hundreds of complaints from dissatisfied customers but despite this it announced a trebling of its sales which showed stellar performance by increasing to £4.48m compared to £1.4m in the previous six months.

The retailer said the surge in business had put in on target to achieve a £9m turnover in its second year.

The firm said following record Christmas sales figures it had continued to build on its success and was now averaging over 6,500 customer orders per month.

So what happened?

We will have to wait to see the administration report but it sounds like the usual rapid growth story where the company has run out of cash trying to fulfill orders that are coming in thick and fast.  Perhaps financial controls were not adequate. Either way when companies are growing fast this can be a difficult time to manage cash flow.  Download our daily cashflow spreadsheet to help you avoid cashflow problems.






Friday, 13 September 2013

Zombie companies in the news again

R3, the insolvency industry body, has raised the prospect of what might happen now that the economy is improving.  They argue that there are 100,000 "zombie companies" which are just surviving due to the benign environment of low interest rates and supportive banks.  This is a reduction of 60,000 from the levels mooted in November 2012 but nonetheless they employ some 480,000 people.  They argue that these businesses are on the cusp of failing should they find themselves facing increased competition and a shortage of cash.  This in turn would put up unemployment and then mean interest rates rises are further away.

This amounts to statement that unemployment will rise in the coming years or that these zombie companies, shedding jobs, will offset any rise in employment over the short term.

R3 have researched the market by asking business owners about the health of their own businesses and have pointed to a recent uptick in the number of businesses that have become insolvent over the last quarter. See our comments on these figures Other indicators have been put forward by an organization called Company Watch who claim that in their analysis 250,000 firms have negative balance sheets and a quarter of these will be unable to pay their debts over the next 3 years and their failure will amount to a reduction of 1% GDP.  Wow that is quite a prediction.

It is our view that these zombie companies are overstated.  Yes, there is a lack of will from banks to crystallize their losses and HMRC have been generally supportive but in reality there have always been inefficient companies in a healthy economy and if these businesses have survived the poor performance of the economy over the last few years then they must be pretty resilient!

One thing is for sure is that over the next couple of years the business environment is going to change and the impacts very unpredictable.  Our advice for businesses to meet these challenges is to have tip top financial management, run a weekly, or even daily, cashflow model, and make sure they know where they stand at all times.  Also be strong in collecting in debts.  You won't lose customers by asking them for money owed and don't extend too much credit.

Why not download our directors toolkit for businesses.  This includes our daily cashflow template.


Tuesday, 10 September 2013

We are not a nation of shopkeepers anymore??

It was once said by a famous Frenchman that the English were a nation of shopkeepers! Well, recently it seems that we have lost our love of setting up shop on the High Street as the vacancy rate is staying at a stubborn 14% around the country.

Wales had the highest national vacancy rate, at an average of 17.5%, Scotland hit 14.9% and England 14.0%. Of the large centres, Blackburn had the highest vacancy rate of 26.9%.

The High Street has hit the headlines recently following on from the stinging criticism that was levelled at Mary Portas aka Queen of Shops.  Her main recommendations were

  • Improve management of High Streets with new "town teams"
  • Affordable town centre car parking
  • "Town centre first" approach in planning
  • Disincentives for landlords who leave shops empty
  • Greater inclusion of the High Street in neighbourhood planning
Former Focus boss Bill Grimsey, who has launched his own rival report on the high street, said she had achieved nothing much and the "Portas Pilots" were more about self promotion, she had been naive and nostalgic.  This was a little unfair as she had not been paid to do the report.  What is more reports are one thing but implementation is key and that should be more directed at councils and the government.  However, in his alternative view he has hit the nail on the head when saying that the business rates were the biggest problem.  Something that Portas agrees with.  In some cases business rates are more than the rents that retailers pay.

Henry Page of Mercer Hole snapped this photo of his local bookshop which closed down recently blaming  threefold increase in business rates in the last 3 years.




Says it all really.  No amount of tinkering around the edges will amount to much if it is so much more expensive to set up on the high street than it is online.  Problem is that a radical reform of business rates would be extremely costly and politically difficult due to the relationship between central and local government.

If your business is struggling with business rates then take a look at our page on this

Monday, 9 September 2013

KSA Group Insolvency Notices

Ikon Design and Build Limited in Liquidation

Meeting of the Creditors of the above named Company will be held at The Hubworking Centre, 5 Wormwood Street, London, EC2M 1RQ on 1 October 2013 at 11.00 am

See full notice below

http://www.companyrescue.co.uk/insolvency-notices/ikon-design-and-build-limited-liquidation-notice

The Fin Machine Company in administration is looking for a buyer

More than 200 jobs are in the balance at The Fin Machine Company (FMC) as the £15m turnover company looks for a buyer. The Seaham based company supplies specialist equipment to the automotive and air conditioning industry.  Lack of working capital has forced the company, which was established in 1985, to call in the admistrators.

Joe McLean and Chris Petts of Grant Thornton were appointed joint administrators to the business on 21 August 2013.

"There is a healthy demand for the company's products but it has not been able to look after the customers in the way that it would like and has been hamstrung by a lack of cash." Said Joe Mclean.

In the year to 31 December 2011, FMC reported a pre-tax loss of £1.3m on sales of £14.8m.

Friday, 6 September 2013

Business Distress Index shows many SME owners don't believe economic news

In the survey data "Business Distress Index" commissioned by R3, the insolvency trade body, 49% of SME owners do not believe in the positive economic signals trumpeted by the Chancellor.  The survey was conducted in the first 2 weeks of July so even since then there have been significant further indicators.

The idea that the economy had moved from "rescue to recovery" was believed more by larger businesses (55%) than by smaller businesses (49%). Ok, the sample size of 501 businesses isn't huge but it indicates that people are yet to be convinced of the recovery.  It should also be remembered that these are mostly surveys rather than hard economic data that is driving the current optimism,  with the exception of house prices perhaps!

The Business Distress Index also reported that the number of businesses that are reporting one or more signs of distress has fallen from 40% in March to 35% in July.  Back in July 2012 over 50% of company owners reported one or more signs of distress.


Liz Bingham, President of R3, commented;  “Having experienced a number of  false dawns in recent years, there is an understandable reluctance on the part of business to herald the recovery, although larger businesses appear more willing than their  smaller counterparts to do so."

Wednesday, 4 September 2013

HMRC to have new powers to look at credit/debit card data

New powers have been granted to HMRC from the 2013 Finance Act which comes into force this week for them to look at the number of credit/debit card transactions that go through a company.  This will be achieved by them going through the merchant provider. The data they will be available to glean will be the total value and number of transactions although they have confirmed that they will not be able identify individuals so privacy concerns should be alleviated.

 HMRC will analyse the data using a risking system.  This means they will cross-reference the data with that already held by the tax authority. The first requests for the data will be sent to merchant acquirers this week but from next year this will be an annual request.

David Gauke, exchequer secretary to the Treasury, said: “The government has given HMRC nearly £1 billion to tackle fraud and evasion, and these new powers give HMRC an extra tool to ensure a level playing field between businesses, and also reducing opportunities for those who try and cheat the system.”

Exactly how this will really help HMRC is open to question, as the money taken from credit card merchants providers are placed directly into the business account.  They have the power to take money out if a transaction is voided so it is unlikely they would countenance the money being sent to a non business account or one that is not connected to the company.  What is more, HMRC have the power to ask businesses for all their bank statements.

We suspect that this may be a scare tactic to discourage bad practice.

Tuesday, 3 September 2013

Law firms may struggle to pay indemnity insurance premiums

It has been discussed many times that law firms are facing leaner times ahead with the SRA having many firms on their "watch list", including a reported 30 in the top 200 firms.  The reasons for this are quite well known;  See our blog on http://companyrescue.blogspot.co.uk/2013/06/law-firms-in-financial-difficulty.html

  • Decline in legal aid.
  • More competition from non lawyers offering legal services as a result of the Legal Services Act
  • Banks becoming less keen on professional services due to weaker balance sheets

Traditionally law firms have not been particularly good at collecting cash in as much of the work is in progress and a focus on billable hours sometimes means that debtors do build up. So if your practice is, or you are



  • Experiencing cashflow problems?
  • You are concerned about paying your professional indemnity premiums?
  • worried that insolvency may affect your ability to practice in the future?
  • You don’t want to risk the SRA Intervention

  • If so then you should read our pages on help for lawyers with cashflow problems

    We are currently helping 4 law firms with their difficulties.  KSA Group were also one of the first firms to do a CVA for a LLP.  See our presentation on the subject.



    Monday, 2 September 2013

    Phoenix companies - Are they going to become more common place?

    Now that the economy is beginning to improve business owners are thinking of stopping unviable businesses and starting again.  The so called use of a "phoenix company" or "pre pack" may become more commonplace.  This is where a new unencumbered company rises from the ashes of the old indebted company to carry on the business.

    Some feel the practice allows directors to escape debts too easily and others say it is a natural recycling of failed businesses....  What is your view?

    The problem is really what is the alternative?  If someone (maybe the previous directors) can come along and buy the assets of the old company when no one else will, does this not benefit the creditors?  Like so many mechanisms it has to be used properly.  In many cases a pre pack is the only way that a business can carry on trading as a particular creditor refuses to support the company but they are crucial for the operation of the business.  This may be a landlord or IT supplier for instance.  The problem is when directors have form with previous failures. In this case it is likely that if they owe HMRC a significant amount of money then they will be expected to come up with a VAT or PAYE deposit to protect against another failure.  In any pre pack the bank may not approve it.

    Strictly speaking a pre pack liquidation is a bit of a misnomer.  It is really a term to cover both situations;  A  pre pack administration or the creation of a phoenix company.  The key is timing.  A pre pack is where the business is sold at the same time as the old shell of the company is put into administration.  A phoenix company does not have to emerge at the same time as the old company is put into liquidation.  Although it does tend to emerge soon afterwards to try and pick up customers and have some sort of continuation.

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