Sir, Pre-pack administration deals continue to attract criticism from creditors left unpaid after a failing retailer has been sold back to the owners who ran it into the ground in the fi rst place. Understandable? Perhaps. 

But it seems few appreciate the benefi ts of this type of transaction when the alternative – keeping the business going for three to six months while trying to find a more suitable buyer – may simply delay the inevitable. 

Keeping the enterprise going at a time where few people are spending and margins are getting squeezed is fi nancially a difficult and perhaps even more damaging decision. 

The problems are numerous. Retail owners and managers out there who have until recently probably paid a premium for their stores but are now struggling to cover the interest may find that their bank is taking its monthly payments from the overdraft facility – racking up even more debt. Their assets have been refinanced to their limits based on optimistic values done in better times. 

When I try and rescue a business, one of the most important things is to try and maintain the value of the company; keeping customers and key staff, and ensuring continuity of supply. 

For those very reasons, acting quickly is essential and the prepack deal allows us to do just that. 

Of course, if you are a struggling retailer, seek independent advice and examine all the options that may be available. 

I say ‘give pre-packs a break’. They have a place – never more so than in the current economy. 

David Moore, partner, Begbies Traynor (corporate rescue specialists)