Nick O’Reilly, director of
Vantis and head of business
recovery association R3, says existing laws prevent turnaround firms from
rescuing companies struggling under the effects of the economic downturn.
He is calling for changes to UK insolvency laws to be able to handle the
expected rise in business failures, which, according to research by
PricewaterhouseCoopers, reached a five-year high already in the second quarter.
More than 3,200 businesses in England and Wales became insolvent – up 22% on
the second three months of 2007, according to mandadeals.co.uk.
‘Normally something can be salvaged by selling the business, but our worry is
that there could be such a high number of cases that there might not be enough
buyers, which could lead to more shutdowns,’ he said.
O’Reilly said the government needed to give turnaround firms more time to
help bring companies out of administration and allow business owners to borrow
against business assets even if they were already leavered.
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