Pre-Packs and Power Plays — How the Rules Are Being Bent

When Huboo Technologies Limited collapsed, its assets were almost immediately purchased by a new entity: Huboo Tech Limited (Company No. 16143472). The sale took place under a pre-pack administration arrangement, a process that is perfectly legal — but increasingly controversial.

This post dives into the mechanics of pre-pack deals, how they were used in the Huboo case, and why they leave suppliers, staff, and creditors out in the cold.

1. What Is a Pre-Pack Administration?

A pre-pack administration is a type of insolvency procedure where the sale of a company’s business and assets is arranged in advance of the company entering administration. The actual sale is executed immediately after administrators are appointed.

It’s designed to protect business continuity — but often at the expense of creditors and transparency.

2. The Huboo Deal: A £9 Acquisition?

In Huboo’s case, the business — once valued at over £300 million — was acquired by its own investors for just £9.

The deal included intellectual property, software, customer contracts, warehouse leases, and equipment — essentially the operational heart of the business.

But unpaid staff, suppliers, and creditors were left behind in the shell company, now renamed HUB Realisations Limited (Company No. 09727464).

3. Who Made the Deal?

The buyers were connected to Baaj Capital and Atalla Capital (AB Capital) — the same investor groups behind the failed entity. In essence, they sold the business to themselves through a new company structure.

This raises serious questions: Was the sale at fair market value? Was it independently scrutinised? Were creditors consulted?

4. SIP 16 and the Lack of Oversight

Pre-pack sales must comply with Statement of Insolvency Practice 16 (SIP 16), which outlines the information administrators must provide. But compliance doesn’t equal fairness.

Many critics argue that SIP 16 lacks real enforcement. There’s no requirement to seek creditor approval prior to the sale, nor any obligation to open the bidding process.

In practice, this allows powerful insiders to buy up viable assets without public scrutiny — leaving liabilities with the old entity.

5. A Legal Loophole — Or a Regulatory Failure?

The law permits pre-packs, but does it protect stakeholders? In the Huboo case, staff were made redundant, suppliers were unpaid, and clients were misled — while directors and investors retained control of a rebranded company.

This isn’t just a legal grey area — it’s a question of ethics and corporate governance.

6. Other Examples: Bodycare and Beyond

This isn’t the first time Baaj Capital-linked firms have used such tactics. The collapse of GM & MM Blackledge (Bodycare) followed a suspiciously similar pattern — last-minute restructuring, sudden administration, and asset transfer to connected parties.

These patterns suggest a strategic use of insolvency as a business tool — raising serious questions about the UK’s regulatory framework.

7. Calls for Reform

Campaigners and MPs have repeatedly called for stronger regulation of pre-pack sales, including mandatory independent valuation, full creditor consultation, and a public bidding process.

Until such measures are enforced, the system will remain vulnerable to manipulation — and ordinary stakeholders will continue to lose out.

Conclusion: When the Rules Work Against the People

Huboo’s £9 pre-pack is a stark reminder that legality doesn’t always equal fairness. If a company can burn through £100 million, collapse, and then restart the next day under new branding, what message does that send to the rest of the business community?

It tells us the rules are being bent — and the only people who win are the ones who already held the cards.

Next: Who’s Still a Client? And Why Are They Staying?