Published: 09/03/2026 By Jane Price
Directors facing financial pressure often consider pre-pack administration first. While pre-packs can be an effective restructuring tool, they are not always the most suitable solution (check out our recent blog on pre-pack administrations what directors need to know).At turpin barker armstrong, we advise directors on all available restructuring and insolvency options. Businesses have several potential routes to stabilise or close a company responsibly and understanding these options early can significantly improve outcomes for both directors and creditors.
Below are some of the key alternatives to consider when a pre-pack administration may not be appropriate.
Why a Pre-Pack may not be suitable
A pre-pack administration may not be the right option where:
- There is no immediate buyer for the business
- Concerns are raised around valuation or the sales process
- Creditor objections risk delaying the transaction
- The business needs time to continue trading and realise value
- Directors are concerned about the visibility or reputational impact of a pre-pack
- In these circumstances, other restructuring tools may provide a more practical solution.
A CVA allows a business to restructure its debts while continuing to trade under existing management. It can work well where the core business remains viable but historic liabilities are creating pressure.
Key points
- Directors retain day-to-day control of the company
- Debts are repaid through an agreed repayment plan
- Requires approval from 75% of creditors by value
2. Trading Administration
In some cases, administration is used to protect the company from creditor action while the business continues trading. Rather than arranging a pre-pack sale immediately, the administrator may operate the business while exploring restructuring or sale opportunities.
This approach can be particularly effective where a business has valuable contracts, strong customer relationships, or assets that require time to market properly.
However, trading during administration can increase costs and requires careful management to preserve value.
3. Restructuring Plan (Part 26A)
A Restructuring Plan under Part 26A of the Companies Act is a court-supervised process that allows companies to compromise debts with creditors.
One of its key features is the ability to bind dissenting creditor groups, sometimes referred to as a “cross-class cram down”.
This option is typically used by larger or more complex businesses, as it requires significant legal input and can involve higher costs. However, it provides a powerful and flexible restructuring tool where creditor agreement may otherwise be difficult to achieve.
4. Informal Time-to-Pay (TTP) arrangements
In some situations, early discussions with key creditors, particularly HMRC or major suppliers, can relieve financial pressure without entering a formal insolvency process.
A TTP arrangement may allow a business to spread outstanding tax liabilities over an agreed period. This approach can be effective for companies experiencing short-term cashflow issues or temporary trading disruption. However, it does not provide legal protection from creditor enforcement and relies on transparent communication with creditors.
5. Liquidation (MVL or CVL)
Where recovery is not possible, liquidation may be the most responsible option. Importantly, liquidation does not always mean a company is insolvent.
Members’ Voluntary Liquidation (MVL) is used when a company is solvent and able to repay all creditors within 12 months. It provides a structured and often tax-efficient way for shareholders to close a business and distribute remaining assets.
Creditors’ Voluntary Liquidation (CVL) applies when a company cannot meet its debts and no rescue options remain. Entering a CVL can stop creditor pressure and help directors demonstrate they are acting responsibly.
Acting early is key
With increased scrutiny from creditors and regulators, directors should seek advice as soon as financial difficulties arise. This includes:
- Monitoring cashflow and maintaining accurate financial records
- Understanding when duties shift towards protecting creditors
- Exploring restructuring options before problems escalate
- A pre-pack administration is just one of several available tools. Considering alternatives early can help protect business value, manage creditor relationships, and reduce potential personal risk for directors.
Every business situation is different. By understanding the full range of restructuring and insolvency options available, directors can make informed decisions that protect both their business and stakeholders.
At turpin barker armstrong, our insolvency specialists support directors through each stage of the process, providing clear guidance and practical solutions tailored to the circumstances.