Jurisdiction(s):
United Kingdom

Majority-shareholder pre-pack: court requires rigorous SIP 16 marketing evidence for connected-party sale; pre-pack pool approval insufficient (Marko Ventures v London Antiaging Clinic) — England and Wales

Published on: 28 February 2025

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

Marko Ventures Ltd v London Antiaging Clinic Ltd [2025] EWHC 340 (Ch) What are the practical implications of this case?

It is settled law that, where an administration application is made concerning a planned pre-pack sale of a company’s business and assets, the applicant must conduct a robust marketing process that satisfies SIP 16 and place sufficient evidence of that compliance before the court. The rationale is that pre-pack transactions present a heightened risk of misuse and detriment to creditors, particularly where the intended buyer is a connected party (see Re Kayley Vending Ltd [2009] EWHC 904 (Ch); Re Moss Groundworks Ltd [2019] EWHC 2825 (Ch)). Historically, in reported decisions, the party seeking the administration order has been the company and/or its directors. Here, however, the application arose against the broader backdrop of a shareholders’ dispute: the company’s majority shareholder sought an administration order to enable it to acquire the business and assets through a pre-pack sale to a newly formed vehicle, thereby excluding the minority shareholder. Accordingly, strict adherence to SIP 16 and transparent, substantiated marketing remain essential, with the court requiring clear proof of compliance, particularly where a connected party is proposed as purchaser...

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