In chapter 6 it was argued that, over recent years, responses to corporate troubles have increasingly tended to be made before any final crisis precipitates formal action. One form of anticipatory action is the pre-packaged administration. This is a device that has been encountered on the UK insolvency scene since the mid-1980s but which has grown in use more recently. It is a device that some commentators herald as a freshly effective mechanism for furthering rescue objectives and others see as a means by which powerful players can bypass carefully constructed statutory protections.

The ‘pre-pack’ is a process in which a troubled company and its creditors conclude an agreement in advance of statutory administration procedures. This has the effect of establishing a deal in advance of the appointment of an administrator and it allows statutory procedures to be implemented at maximum speed. The danger most commonly pointed to is that such speedy implementations of faits accomplis will tend to ride roughshod over the procedural and substantive interests of less powerful creditors.

This chapter looks at the development of the pre-pack, identifies the issues raised by this device, and considers how insolvency law might respond to the burgeoning popularity of such agreements. A particular concern will be whether the advent of the pre-pack calls for a rethinking of current approaches to the protection of those interests that are affected by corporate troubles.