When is  phoenixing  not appropriate?

Some employees are no longer needed

If there is a general feeling that you have more employees on board than the company can support or if, for some reasons you feel that you are accommodating the wrong type of employees, it will help you to know that a pre packaged sale will not help you get rid of them.

This is because, according to the European Employment law, the employees should move to the newly formed company with the same terms that they were enjoying before. This restricts you from making any meaningful changes to wage structure or employee structure because this will form the basis of laying claims by the affected employees. Therefore, if you wish to dispense with them, you are likely to be sued for wrongful dismissal.

Availability of a winding up petition

Having a winding up petition will serve as a deterrent for pre pack administration process. This is just because upon the commencement of winding up, none of the assets of the company can be disposed off before a creditor’s meeting appoints a liquidator.

So at this stage, you may want to consider some other options such as business bankruptcy.