Profession profits from soaring insolvencies

Insolvency Service figures released last week showed a 220% surge in number of administrations, receiverships and company voluntary arrangements for the final quarter of 2008 compared to the previous year.

Insolvency specialists expect demand to be even stronger this year. David Kerr head of the Insolvency Practitioners Association said: ‘The numbers of insolvencies haven’t been this high since the last recession.

The expectation among practitioners is that the economy will get worse before it gets better and IPs will be even busier than before.’

Tony Murphy, a restructuring and recovery director at Smith & Williamson, said: ‘It’s shaping up to be incredibly busy. It’s going to be as deep and as bad as 1989-92, but it will be different. Another economy is normally doing quite well, but this time, the whole globe is in it.’

PricewaterhouseCoopers and Deloitte have landed some of the highest profile administrations in Lehman Brothers and Woolworths.

Accountancy Age understands PwC has made more than £50m for its work between 15 September and 31 December 2008 as it began its efforts to unravel Lehman Brothers European business.

The big accounting firms remain tight-lipped about fees, although Deloitte is thought to be in line for a multi-million payout after recouping all investment made by Woolworths bankers Burdale and GE Finance.

Ernst & Young and KPMG’s business recovery arms also gained big-ticket jobs. E&Y administrators took control of Zavvi after the DVD retailer was one of the biggest victims of the Woolworths collapse.