Pre-Pack Administrations: Legal or Loophole?

When Huboo Technologies Limited was sold for £9 through a pre-pack administration in December 2024, many were left stunned. How can a company once valued in the hundreds of millions be sold for the cost of a sandwich?

To understand, we must examine the increasingly controversial practice of pre-pack administrations — a process legal in the UK, but widely criticised for undermining accountability.

1. What Is a Pre-Pack Administration?

A pre-pack administration is a sale of a company’s business and/or assets arranged before the company formally enters administration. The sale is executed immediately after administrators are appointed.

The goal? To preserve value, jobs, and continuity. But when the same directors or connected parties repurchase the business — as seen with Huboo — the lines between rescue and manipulation become blurred.

2. How It Played Out with Huboo

• Huboo’s investors lost over £118 million in equity.
• Secured lenders were repaid or recovered part of their exposure.
• Trade creditors and suppliers were wiped out.
• The buyer — HUBOO TECH Limited (Company No. 16143472) — was closely linked to the original management.

This wasn’t a turnaround. It was a reset without responsibility.

3. Who Approves These Deals?

In theory, administrators act in the best interests of creditors. However, in practice, deals are often made quickly — with little oversight — and with minimal involvement from the very creditors being harmed.

The SIP 16 memorandum is supposed to provide transparency, but most stakeholders don’t even see it unless they request it — after the fact.

4. A System Exploited

Huboo is not alone. Pre-pack sales have become a go-to strategy for failing startups and debt-loaded operations looking for a clean slate.

While the legal framework exists to allow rescue, it is frequently exploited to:

• Protect directors from scrutiny
• Preserve shareholder control through new entities
• Evade supplier liabilities
• Continue trading with the same customer base without disclosure

5. Is It Legal? Yes. Is It Ethical? That’s Another Story.

There’s no question that pre-packs are permitted under UK insolvency law. But when companies use the structure to escape debts, erase histories, and deceive customers, the ethical breach becomes undeniable.

Customers of Huboo Tech today might not even realise they’re working with a different legal entity — one that doesn’t carry the liabilities of the past.

6. The £9 Question

Why was a company with fulfilment centres, clients, technology, and staff sold for just £9? The answer lies in valuations of goodwill, intellectual property, and risk mitigation.

But it also reveals just how little real value the business had — once its funding dried up and losses mounted.

Conclusion: Time to Reform

Pre-pack administrations need independent oversight, not just administrator discretion. Connected party sales should trigger automatic investigations, and customers must be notified of any change in legal status.

Until reforms are made, pre-packs remain a legalised loophole — and companies like Huboo will continue to collapse without consequence, only to rise again in another name.

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