Fears of high-profile insolvencies could prove to be unfounded

Fears of high-profile insolvencies could prove to be unfounded

The loss of almost 300 jobs at subsidiaries of northern construction business Dew Pitchmastic again raises concerns that a swathe of businesses are on the brink of collapse

With Ernst & Young’s quarterly profit warnings survey showing a high
number of corporate problems, and government statistics indicating a growing
figure of liquidations and administrative proceedings, the profession is waiting
on tenterhooks for the next big insolvency case.

Is there another MG Rover around the corner or a rush of high profile
businesses going under?

Although the economy could best be described as tepid, banks are still
providing credit for businesses, perhaps in a greater proportion than to
debt-laden individuals.

Simon Allport, a corporate restructuring partner in Ernst & Young’s
Manchester office, expects manufacturing business, generally based in the north
of England, to struggle on in the future amid high energy costs and big pension
deficits.

Despite this, he does not expect a string of high-profile business failures,
due to the more sophisticated approach by industry and accounting professionals
in advising struggling companies earlier on in the debt cycle.

Tony Supperstone, head of insolvency trade body R3, agrees: ‘During the 1990s
everyone realised it was no good companies just failing, banks losing customers,
auditors losing clients.’

As far as sectors go, he agrees that manufacturing is potentially the biggest
area of concern, with rising individual insolvencies representing a growing area
of work for practitioners in the future.

But with traditional businesses like Hunter Rubber and Dewhurst entering debt
proceedings, and individual insolvencies expected to go through the roof, the
profession is still set for a busy future, despite it being unlikely that the
high street will go to the wall.

Related Articles

Carillion CFO blew whistle over 'sloppy accounting' months before collapse

Business Recovery Carillion CFO blew whistle over 'sloppy accounting' months before collapse

5m Alia Shoaib, Reporter
Toys R Us UK and Maplin enter into administration after failing to secure buyers

Business Recovery Toys R Us UK and Maplin enter into administration after failing to secure buyers

5m Alia Shoaib, Reporter
How to avoid a Carillion collapse

Business Recovery How to avoid a Carillion collapse

6m Russell-Cooke
Carillion collapse: The week so far and industry reaction

Business Recovery Carillion collapse: The week so far and industry reaction

6m Emma Smith, Managing Editor
Kingston Smith & Partners appointed trustees in bankruptcy of ex-Newcastle United footballer

Business Recovery Kingston Smith & Partners appointed trustees in bankruptcy of ex-Newcastle United footballer

6m Emma Smith, Managing Editor
Carillion: PwC appointed as special managers – what happens now?

Business Recovery Carillion: PwC appointed as special managers – what happens now?

6m Emma Smith, Managing Editor
Investment firm acquires Avon Steel Company Limited

Business Recovery Investment firm acquires Avon Steel Company Limited

7m Emma Smith, Managing Editor
Manchester law firm enters into administration

Business Recovery Manchester law firm enters into administration

7m Emma Smith, Managing Editor