The British Property Federation (BPF) have claimed that the insolvency system is underhand when it comes to the retail sector and have released a statement saying that pre-pack administrations are a means of reinforcing failure. Securing the best results for the creditors is meant to be the main role of the IP, however they are becoming concerned that their biggest concern is becoming the interests of the buyers.
However a representative of R3 (the biggest insolvency body) have expelled the assertions regarding underhand dealings and accusations that the insolvency system is unfair.
A pre-pack is in place to allow a potential sale once other options have been exhausted. It is in everyone’s best interest as it maintains some value in the ailing business.
A purchaser is given a license to occupy a company’s premises by an administrator in a pre-pack. This would provide the landlord with a temporary tenant, allowing the landlord the opportunity to negotiate terms of a tenancy with a new tenant whilst still being paid rent.
For a turnaround investment specialist like Beer & Young it is always interesting to hear the views of trade bodies regarding the state of the economy. Contact us if you would like some real help.
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