The word of the year in the world of print and paper has been “pre-pack.” Initially welcomed by the industry as a method to salvage insolvent companies, giving them time to live again under a new name and retaining their workforce, pre-pack deals have become tainted.
Pre-packs began life in 2002 under the Enterprise Act, to allow for the sale of an insolvent firm’s business and assets before the company goes into administration. Its main advantage is to retain all or some of the workforce, and essentially keep the business afloat and prevent the company from disappearing. However, the downside is unsecured creditors may not get paid and it can leave a bad taste among suppliers and customers, who are left high and dry. They may not wish to deal with the new company having been stung once, especially if those running the new company are more or less the same as before, and worse still, appear not to have changed their business model to prevent the business collapsing again.
Read the full story and other printing industry stories at http://www.printmonthly.co.uk/Specials/Industry/6228/phoenix-firms-pre-packs-and and more freelance info from Harry at http://www.harrymottram.co.uk/?page_id=1956