PracticeAccounting FirmsInsolvencies on steep rise

Insolvencies on steep rise

The number of companies going into administration in England and Wales has jumped by more than one-fifth

The number of companies going into administration in England and Wales jumped
by more than one-fifth in the first three months of the year, while bankruptcies
soared by 25%, the latest government figures show.

In all, 858 companies entered administration in the period, according to
Insolvency Service
figures – the second-highest figure since 1998; 54% higher than the previous
quarter; and 22% higher than first three months of 2007, The Times
reports.

Experts said the trend would continue. Liz Bingham,
Ernst
& Young
partner and head of restructuring, said the rise in corporate
insolvencies was the first sign of a trend which would accelerate in late 2008
and into 2009 ‘as the credit squeeze tightens its grip and constrains demand as
well as credit’.

Ken Baird, head of restructuring and insolvency, at the law firm Freshfields,
said: ‘The longer the credit crunch goes on, the harder it will be for many to
obtain new finance or renegotiate debts.’

Further reading:

Read
The Times story

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