Pre-pack sale (pre-packaged administration)

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-06

// THE SHORT ANSWER

A pre-pack is a sale of an insolvent company's business or assets that is negotiated before an administrator is appointed and completed on or soon after appointment, so the business changes hands without trading through a public insolvency. It can preserve value a slower process would lose, and secured lenders, paid first, often support it. The concern is price and buyer, especially when the buyer is the old owners: in the UK, a substantial sale to a connected person in the first eight weeks of administration needs creditor approval or an independent evaluator's report. In Australia and New Zealand, similar sales are agreed before a receivership or voluntary administration.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.