Pre-pack
A pre-pack is a preparatory phase preceding bankruptcy, in which a prospective trustee is already involved to arrange the continuation of the business.
The pre-pack is a practice developed in the Netherlands in the field of insolvency law. Under this arrangement, prior to the declaration of bankruptcy, the court appoints a prospective trustee who prepares the sale of assets on a confidential basis.
This instrument is relevant because it promotes the continuity of the enterprise, maximises returns for creditors and preserves jobs. It prevents the enterprise from losing value as a result of the public announcement of the bankruptcy.
In practice, the pre-pack is primarily applied to companies with a viable core activity, followed by a restart immediately after the bankruptcy.
“The court has appointed a prospective trustee in the context of the pre-pack to prepare the sale of the assets.”
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