Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie
Hi there,
There is an issue with role permissions that is being worked on at the moment.
If you are having trouble with access or permissions on regional forums please post here to get access: https://www.boards.ie/discussion/2058365403/you-do-not-have-permission-for-that#latest

Has anyone experience with a pre-pack administration?

  • 23-04-2016 9:13pm
    #1
    _Ace_
    Registered Users, Registered Users 2 Posts: 23 ✭


    A supplier in the far east has disappeared with a large figure sum that was sent to pay for stock.

    This has left a glaring black hole in the business finances to the extent where I've pumped in personal money over the last months to buy in goods.

    The ultimate frustration is that the business makes money, and the model works - ridiculously well, and before this happened we spoke about replicating at scale with more outlets, but with several returns and invoices due and not enough money to both pay them and continue buying stock (which needs to happens several times per month), I've opted for the stock and it's all building up. I genuinely fear for the future.

    I've been to several solicitors and accountancy firms recently for advice and a recurring theme is a pre-pack, where we can secure the assets.

    Everyone I spoke to was open enough to not only present it as an option, but a strong and favoured recommendation.

    I've never done anything like this before. I'm interested in the thoughts of those that have.


Comments

  • #2
    pedroeibar1
    Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    Very strange. Why would you pay ‘a large sum’ to the Far East without first securing it? Why did none of the solicitors/accountants not explain what ‘Administration’ involved, i.e. purpose, cost and what it is NOT for? (protecting shareholders) Why did you not mention examinership? What makes you think that a Court would approve this?
    Methinks this is a homework question.


  • #3
    VincePP
    Closed Accounts Posts: 982 ✭✭✭VincePP


    I'll guess you are based in Northern Ireland where a prepack administration is available and used.

    It is similar to examinership down here, but simpler.

    It looks like you must show a verifable reason for the problem and show how it wont re-occur.

    Its not something I have any experience in and you may be better asking on a UK based forum, but in general it seems to work well as many companies have done it.

    edit - in Ireland we have pre-pack receivership. Clerys was a classic example
    http://www.cpaireland.ie/docs/default-source/JobSeekers/pre-pack-receiverships--the-new-game-in-town.pdf?sfvrsn=2


  • #4
    pedroeibar1
    Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    VincePP wrote: »
    edit - in Ireland we have pre-pack receivership. Clerys was a classic example
    http://www.cpaireland.ie/docs/default-source/JobSeekers/pre-pack-receiverships--the-new-game-in-town.pdf?sfvrsn=2

    That is a totally different animal. Also, the article quoted is not very appropriate as it pre-dates the recent Companies Act.


  • #5
    VincePP
    Closed Accounts Posts: 982 ✭✭✭VincePP


    pedroeibar1 wrote: »
    That is a totally different animal. Also, the article quoted is not very appropriate as it pre-dates the recent Companies Act.

    Not Clery's 2015 that was a liquidation - Clery's 2012 was a prepackaged receivership when the guiney family withdrew and Gordon Bros took over without the store closing its doors.



    But yes, i do reckon its a question on some exam paper that was written for British students.


  • #6
    antoinolachtnai
    Registered Users, Registered Users 2 Posts: 9,815 ✭✭✭antoinolachtnai


    A receivership is not really like an administration or examinership.

    You don't necessarily need to do any of this, if you can get your creditors to agree terms without an examinership or administration being required. But for various reasons that may not be possible.

    It may also be possible to finance what you want to do somehow or other, without needing to restructure the whole thing. It depends what the balance sheet looks like.

    The idea of a 'prepack' is that there is a detailed plan in place in advance for the administration/examinership, rather than the plan being put in place during the period of administration/examinership. There are a number of 'interesting' things about taking this approach. Just because you have prepackaged it does not mean the creditors and the judge are going to go along with it. It all really has to do with being fair to the people who are owed money.

    All this is great but the problem is that you start to run up serious professional services fees, and ultimately these have to be figured into the future of the business, and they take precedence over all other debt. Would your creditors rather have that money than to have to be faced with the palaver of a restructuring? It all depends on the scale of what you are talking about.

    a.


  • Advertisement
Advertisement