The spotlight was turned on pre-pack administrations as an influential panel of MPs looked into whether companies were abusing the system.
The Insolvency Service evidence session of the Business and Enterprise Committee was chaired by Peter Luff at the House of Commons yesterday.

The session was called after a number of retailers such as homeware and tea firm Whittards of Chelsea and furniture chain FADS have used the pre-pack process, where a buyer is lined up before they go into administration.

Graham Horne, the deputy chief executive of the Insolvency Service, told the committee he would be looking at every administration to make sure the 'spirit' of the law was followed.

Mr Horne explained the buyer will come from within the company, snapping it up cheaply and able to write off debts - often leaving suppliers with no choice but to continue trading with the 'new' firm.

Mr Horne promised the committee the service would 'actively police' administrations.