Company failures rocket
Aug 07 2009
Corporate liquidations and creditors’ voluntary liquidations soared to more than 5,000 in the second quarter of 2009, according to the latest government figures.
This was an increase of 2.9 per cent on the previous quarter and a rise of 39.1 per cent compared to the same period a year ago.
Alec Pillmoor, partner at restructuring firm Baker Tilly, says: ‘These figures are obviously a reflection of the harsh economic climate. In the next quarter I wouldn’t be surprised to see corporate failures continue to increase. Not enough companies are making the right changes to tackle their underlying problems.’
Alan Tomlinson of insolvency practitioners Tomlinsons, says: ‘When the economy finally does improve, the number of corporate insolvencies will continue to rise, even if at a slower rate, due to a lag effect. For many businesses, the rot has set in to such an extent that even a sharp recovery will be too little too late.’
According to business advisory firm Deloitte, companies falling into administration increased by two per cent compared to the last six months of 2009, indicating that the rate of companies going into administration may be starting to plateau.
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