Insolvency figures 'skewed'
The next set of insolvency figures for the UK will be radically 'skewed' by the administration of just one US company, car part manufacturer Federal-Mogul, and its 133 British subsidiaries.
Annual administration figures for 2001 will be published in February next year, but business recovery experts are already predicting they will be massively inflated by the Federal-Mogul collapse. Figures for the year to November 2001 reveal only 481 appointments.
The scale of the Federal-Mogul collapse, handled by administrators from Kroll Buckler Phillips in the UK, has now prompted calls for a change in the way insolvency figures are compiled.
Currently all subsidiaries are counted as separate administrations in British statistics. All the separate UK companies of Federal-Mogul, including Champion, Anco and Wagner, will be added to department of trade figures.
Roger Oldfield, president of R3, the Association of Business Recovery professionals and senior insolvency partner at KPMG, said: ‘It will completely skew the numbers.’
Keith Goodman, senior partner at insolvency practice Leonard Curtis, added that change is now urgently required. ‘A group should be counted as one administration. If you say there’s more than one it’s misleading, you’re closer to reality when you say it’s one group.’
Proponents say each company has its own creditors and appointments are made for each subsidiary. They also say some companies within a group may not be in financial difficulties.
A spokesman for Enron the administrator said: ‘Kroll Buchler Phillips petitioned for and were granted administration Orders for 133 companies within the Federal-Mogul UK Group.’
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