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ARTICLE · 13 DECEMBER 2022

Pre-Pack Administrations – Transaction Timing

Mayer Brown
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At a time where multiple headwinds, including the highest inflation in over 40 years, challenging energy prices, rising interest rates and supply chain disruption...

United KingdomInsolvency/Bankruptcy/Re-Structuring
Sheena Frazer
Sheena Frazer
Amy Jacks
Amy Jacks
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Introduction

At a time where multiple headwinds, including the highest inflation in over 40 years, challenging energy prices, rising interest rates and supply chain disruption, are having a real impact on businesses (large and small), a company can find itself in financial distress with very little runway to craft and implement a restructuring solution. With increased volatility in the financial markets, refinancing or other forms of financial restructuring may be untenable, with a sale of the business and assets of a company being the only viable solution. Pre-pack administration sales have continued to be a steadfast mechanism for selling a distressed business whilst preserving the value of critical assets like brand and goodwill. That said, the transparency of pre-packs (or lack of) have been much criticised, which has led to tighter regulation, particularly around connected party transactions and marketing processes. Stakeholders must also ensure that the

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