Profession profits from soaring insolvencies
Firms expect to make record revenues from their business recovery arms as the economic climate worsens
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.