A Pre Pack Administration is all about saving a viable business from closing down forever.

The MPs’ report on The Insolvency Service, published last week, also concluded that phoenix buy-backs caused "particular outrage," and that many small to medium enterprises were suffering "unreasonable financial harm" as a result of pre-packs.

The report stated: "Pre-packs of this kind fuel understandable concerns about illegitimate, self-serving alliances between directors and insolvency practitioners. The interests of unsecured trade creditors must take a higher priority, especially in ‘phoenix’ pre-pack administrations."

Justin Stephenson Director of the TMA stated that "Yes, there have been occasions when pre-packs have been abused, but legal powers already exist to strike off directors and disqualify insolvency practitioners involved in such cases.

"And neither these abuses nor the small disadvantage to unsecured creditors alter the fact that pre-packs can be a very valuable tool in the right circumstances to save businesses and jobs and minimise losses to secured creditors. Saving viable businesses must be the ultimate goal for the greater good of UK plc."

For more information on pre pack administration or to discuss your Company with a trained corporate recovery specialist follow the links or contact Phillip Evans direct on 0797 0500 425.

The research also reveals that a quarter of the accountants surveyed believe their clients are more nervous about investing in their business. Forecasts are now showing that the number of business failures is expected to increase by 18% by the end of 2009 with a large number of businesses already talking with corporate recovery experts.

As traditional lenders start to tighten their funding lines it is important for small to mid sized businesses to know that there are other business finance options. Independent finance brokers often have a better understanding of the challenges faced by SMEs and can plug the funding gap through more flexible finance packages, tailored to business requirements.

It’s important that businesses seek advice early and not to get caught in a cash flow problem as solutions often exist.

For further information on cash flow finance or corporate restructure please contact Phillip Evans direct on 01623 812902 or follow some of the appropriate finance links.