"Pre-packs are only possible in jurisdictions where the directors retain effective management control post filing, can predict the outcome of the insolvency with a sufficient level of certainty to entertain a filing in the first place and believe their position will benefit as a result...."

 

"Where a pre-prepared bid that maintains the viable portion of the business and employment is put on the table at the time of filing, the bankruptcy trustees and or the court tend to exercise their discretion in favour of the incumbent bidder. If the business is sold and employment maintained that is a success for the trustee /court and in most countries there is little incentive for them to exercise their discretion to help post filing competing bidders for the sake of achieving a better return to the creditors that may or may not materialize..."

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"Directors and senior management control access to the information necessary to perform due diligence. Once the directors have developed a relationship with their new finance provider, they will view them as their boss and they will not risk alienating them by using their control over the flow of information to drum up competition beyond their legal responsibilities...."

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