Managed Buy Out (Phoenix)
This is the practice whereby the directors acquire assets of an insolvent company from its liquidator or an administrator under a pre packed administration. This is common practice if the directors have only limited funds and resources to put into an already insolvent company.
A new company is set up and acquires the assets of the old company. The new company is solvent from day one and can trade using the assets of the old company. In most circumstances it is possible to continue trading from the same premises.
Key Benefits of a Management Buyout
- The new company can acquire assets from the old company.
- The newly formed company is free from debt and trades from a position of strength.
In most circumstances the company can continue trading from the same leased or rented premises.
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