Are pre-packs in the property industry a friend or foe, asks Siobhan Jones
The first half of 2011 has passed, and with it also the June quarter day. The result? Much comment about the state of the property market at this midpoint in 2011, which coincides with the collapse of a large number of retailers and reports of others which are apparently at the brink of collapse or having to restructure their business.
A renewed discussion about “pre-pack” administrations has emerged as a result of these developments, especially in light of the recent government proposals to amend the legislation relating to pre-pack sales in order to provide creditors (the largest group of which often comprises landlords) with a higher level of protection. This is perhaps the perfect opportunity to revisit the issues faced by struggling companies (most notably and topically retailers) and their unsecured creditor landlords when faced with the prospect of a pre-pack sale, and to look at how the government now proposes to tackle the growing unease.
What is a pre-pack?
“Pre-pack” stands for “pre-packaged sale”. This involves the appointment
