BusinessBusiness RecoveryA pre-pack storm that won’t subside

A pre-pack storm that won’t subside

I READ with interest the news that the ICAEW has launched an investigation into Ernst and Young’s handling of the “jumbo sized”, and therefore lucrative, pre-pack administration of Greek telecoms giant Wind Hellas.

That company folded in 2009 owing roughly £1.3bn but was sold back to its Egyptian billionaire owner in a pre-pack deal, and now trades as Weather Investments. Junior bondholders in Wind Hellas, who lost millions as a result of the administration, have raised serious questions about various alleged conflicts of interest surrounding this case.

It has been asked as to why E&Y took on the administration when it had pre-existing commercial ties with other members of the Wind Hellas group.

To be honest, as a credit information specialist, I’ve never been enamoured with the notion of pre-packs, and I’m pretty sure the rest of the credit management industry is right behind me on this one.

When a company goes bust owing you money, there’s nothing more galling than to see a similar company run by the same management team start to trade as if nothing had happened. In these situations, the interest of certain parties (owners, employees, and dare I say, auditors) always seem to be put well ahead of those of poor old unsecured creditors.

If we must have them, pre-pack administrations must be governed by rules that must be rigidly applied and strictly adhered to, otherwise many will be left with a sour taste in the mouth and a feeling of being hard done by.

Related Articles

CVR Global sells DMG Steelworkers out of administration in pre-pack deal

Accounting Firms CVR Global sells DMG Steelworkers out of administration in pre-pack deal

1y Richard Crump, Writer
Unpacking the Pre-Pack Pool

Business Recovery Unpacking the Pre-Pack Pool

1y Chris Warmoll, Writer
Devon firm saved from administration in connected party pre-pack deal

Accounting Firms Devon firm saved from administration in connected party pre-pack deal

2y Fraser Simpson, Reporter
The Pre Pack Pool: problem-prone, time-consuming, costly and pointless

Business Recovery The Pre Pack Pool: problem-prone, time-consuming, costly and pointless

2y Accountancy Age, Reporters
Ben Sherman in pre-pack deal

Business Recovery Ben Sherman in pre-pack deal

2y Chris Warmoll, Writer
Controversial pre-pack reforms begin

Business Recovery Controversial pre-pack reforms begin

2y Richard Crump, Writer
Begbies snaps up P&A Partnership in pre-pack deal

Accounting Firms Begbies snaps up P&A Partnership in pre-pack deal

2y Richard Crump, Writer
Hellas liquidator to push EY for compensation over botched administration

Accounting Firms Hellas liquidator to push EY for compensation over botched administration

3y Richard Crump, Writer