Business owe more than £55bn to creditors
Companies under the cosh as creditors become more willing to take court action to recover what they are owed
161,000 companies are experiencing ‘significant’ or ‘critical’ financial
distress owing creditors, suppliers and service providers more than £55bn.
This is partially down to hardening attitudes of trade creditors more willing
to take court action to recover what they are owed.
Insolvency specialists Begbies Traynor made the announcement in its latest
Red Flag update, which monitors the warning signs of companies in distress.
According to the firm the number of troubled companies rose by 20,074 to
161,601, compared to the first quarter of 2009.
“We estimate that approximately 7% of the increase is the result of a shift
in trade creditor behaviour, with an increase in court actions evidence of their
willingness to take action against their debtors,” Begbies Traynor said.