Pros and cons of liquidating a company
As such the solution cannot be used as an employee restructuring tool.If any employees are not required the new company can make them redundant.
As such with proper management company goodwill should be maintained.4.New investment focused on building new business The Pre Pack process allows investment to be used by the new company.There is no risk these funds will be used to pay old debt. Instead the funds are used for business development.3.However, your duties and responsibilities as a director remain.During the liquidation you are allowed to act as the director of another company unless you are subject to a disqualification order, have given a disqualification undertaking or are an undischarged bankrupt.Critics claim…Pre-packs are a ‘rip-off’ – It is understandable that creditors who are informed of a pre-pack deal after the fact would be suspicious of the procedure.
Critics also believe some business people use pre-packs to get out of debts and obligations so creditors lose out as a result.
This would be likely to leave creditors in an even worse position.5.
Pre Pack cannot be used to restructure employees TUPE rules govern the employment rights of employees affected by Pre Pack Liquidation.
However it is possible to maintain employees and teams where they are required.5.
Better return for creditors than Liquidation A Pre Pack involves the sale of the old company’s assets to a new enterprise.
Employees and teams maintained When using a Pre Pack solution all employees are transferred to the new company under TUPE rules.