A UK-based toy manufacturing company instructed Samuel Okoronkwo Jr. to provide legal advice following its financial collapse and subsequent restructuring. The business had suffered the loss of major accounts and faced rising supplier costs, leading to voluntary liquidation with substantial arrears. A new entity was incorporated to acquire the company’s assets through a pre-pack administration.
The consultation addressed key legal concerns including TUPE (Transfer of Undertakings Protection of Employment) obligations, director duties, and employment law risks. The new company agreed to retain all salaried employees except one director and shareholder, citing HR concerns and mismanagement. Although the excluded director asserted employee status, her PAYE registration had only recently commenced and no formal employment contract was in place, raising questions about her legal standing and the potential for tribunal proceedings.
Samuel Jr. provided general advice on TUPE exceptions, particularly Economic, Technical or Organisational (ETO) grounds, and stressed the importance of issuing a protected exit offer. He also outlined the legal framework surrounding the pre-pack process, including funding arrangements, asset valuation, and potential challenges from creditors. Directors were reminded of their statutory responsibilities under the Companies Act 2006 and the potential liabilities arising under insolvency and health and safety legislation. The matter illustrates the strategic deployment of pre-pack administration and the intricate legal considerations involved in employment transfers, director disputes, and corporate governance.
Call us – Mon-Fri 8:30am – 6:30pm
+44 (0) 20 3034 0077
By submitting this form, I accept this website’s Privacy Policy