Newspaper article The Evening Standard (London, England)

Perils of 'Doing a Pre-Pack' It Might Save Ailing Firms but Creditors Are Left Bitter; (1) Fast Turnaround: This Marylebone Branch of FishWorks Is Part of the Chain Which Went into Administration but Was Soon Bought Up (2) Least-Worst Option? Chef Tom Aikens Sold His Restaurants Lawfully While Suppliers Went Unpaid; and Insolvency Expert Dan Schwarzmann of PricewaterhouseCoopers

Newspaper article The Evening Standard (London, England)

Perils of 'Doing a Pre-Pack' It Might Save Ailing Firms but Creditors Are Left Bitter; (1) Fast Turnaround: This Marylebone Branch of FishWorks Is Part of the Chain Which Went into Administration but Was Soon Bought Up (2) Least-Worst Option? Chef Tom Aikens Sold His Restaurants Lawfully While Suppliers Went Unpaid; and Insolvency Expert Dan Schwarzmann of PricewaterhouseCoopers

Article excerpt

Byline: JOSHUA ROZENBERG

THE restructuring of FishWorks struck me as a classic of its kind. Despite the departure last year of its founder, Mitch Tonks, and the sale of some underperforming outlets, the seafood chain was still in difficulties and shares were suspended on 7 January.

PricewaterhouseCoopers (PwC) were formally appointed administrators last Tuesday. A day later, they sold the brand and four restaurants, including two in central London, to a private investor, Ranjit Boparan, who had made his money as a chicken processor.

But Boporan did not want to burden himself with the remaining six sites, including restaurants in Chelsea, Islington, Primrose Hill and Chiswick. These were closed immediately with the loss of 90 jobs.

The deal was described in one newspaper as a "pre-pack" nothing to do with processed food but still regarded by some as a term of abuse.

A typical pre-packaged administration sale is one where an insolvent company goes into administration for no more than a minute before its assets are sold to another company. If the purchasing company is owned by the same people as the selling company, the pre-pack is sometimes known as a "phoenix" because it enables the same business to be born again from its own ashes. Either way, it carries on trading.

PwC said FishWorks was not a pre-pack in the usual sense because the administration and sale were not announced and completed on the same day. However,since 50 potential purchasers were approached and five bids considered, the administrators must have been identifying potential buyers before being formally appointed in case, as seemed likely, the company became insolvent.

A good example of a phoenix rising from the gas stove is Tom Aikens. As the Evening Standard reported this month, the celebrity chef sold two of his restaurants to a holding company called TA Holdco, continuing to trade lawfully while suppliers were left unpaid.

Pre-packs are particularly attractive to an insolvent company's bankers and to potential purchasers. …

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