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Pre-Christmas insolvencies rise

Dec 12 2008

More businesses are declaring pre-Christmas insolvencies as many firms have to slash costs to remain competitive, according to new figures.

Tenon Recovery, a turnaround, recovery, restructuring and insolvency company, says calls for help it has received have increased by 200 per cent since last year.

Companies are reporting that margins are being cut, leaving them with 'little fat' to weather the usually quiet new year period.

Head of the firm Carl Jackson says he thinks the figures being seen now are a precursor to a raft of insolvencies in early 2009.

It is usual for non-seasonal firms to stop trading before Christmas but this year has seen a much larger number fail, Jackson states.

'We're advising all companies to get a winter "health check" to diagnose any snuffles so they can be put right before they become fatal to the company,' he adds.

The Financial Services Authority is currently seeking information from the US on how the country handles insolvencies and why the system works more effectively than the UK, the Financial Times reports.

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