With potential claims from legacy employees often regarded as a hindrance to corporate rescues, the Court of Appeal’s judgement in Crystal Palace FC Ltd v Kavanagh and others should offer potential buyers some assurance.
Provided that pre-sale staff dismissals were to enable the company in administration to continue to trade, the court found that the business could be sold without passing TUPE liability to the purchaser.
Ultimately the case before the court was decided on its unique facts, but the decision is an important development since it widens the previous approach in dealing with actions of the administrator in preparation for an eventual sale.
Staffing issues are one of the many pitfalls in acquiring a business in administration, and with the potential for severe consequences in discovering problems too late, it pays to seek specialist advice early on.
For more information about business acquisitions please contact our commercial department by emailing commercial@tolhurstfisher.com for further information.
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