Company liquidation numbers soar
4 May 09
The number of companies falling into liquidation has leaped by 56 per cent to 4,941 in the first quarter of 2009 compared to the same period a year ago, according to thelatest corporate and personal insolvency statistics released by The Insolvency Service
This is a rise of 7.1 per cent on the previous quarter, made up of 1,579 compulsory liquidations and 3,362 creditors voluntary arrangements.
Additionally, there were 1,783 other corporate insolvencies in the first quarter comprising 316 receiverships, 1,311 administrations and 156 company voluntary arrangements. This represents an increase of 54 per cent on the same period a year ago.
Stephen Speed, chief executive of the Insolvency Service said: "Insolvency procedures exist to provide debt relief for insolvent companies and individuals enabling them to make a fresh start and regularise their financial position. However insolvency procedures do have serious consequences and can have far-reaching implications for directors and individuals.
"It is vital that any person or any company concerned about their financial position should seek advice as early as possible. Insolvency can often be avoided entirely by taking early action."
Malcolm Shierson, partner at Grant Thornton’s Recovery and Reorganisation practice, said: “As company insolvencies typically lag behind overall economic performance, it is safe to say we haven’t seen the worse.”
Geoff Carton-Kelly, head of the London Restructuring and Recovery team at Baker Tilly said: “The lack of a steep rise suggests many businesses that would otherwise expect to be in serious trouble are proving quite resilient.
“Conversely it could mean that insolvencies will rise again as problems currently being deferred will come to rear their ugly heads later in 2009.”