CORPORATE INSOLVENCIES continue to increase quarter-on-quarter according to the latest government statistics from the Insolvency Service.
Overall, corporate insolvencies increased 12.5% the fourth quarter of 2010, PwC analysis of the figures show.
Company Voluntary Arrangements, in which the company repays a percentage of debt over a period of time, rose to 183 compared to 170 in the last quarter and 204 for the same period a year ago.
There were 782 administrations in the first quarter of 2011, a 22% rise compared to the previous quarter.
Receiverships also increased to 349 from 302 in the most recent quarter and 356 for the same period a year ago.
Retail was the worst-hit sector, with administrations in the first three months of the year up 55% on the last three months of 2010.
“The retail insolvency increase highlights the current issues facing consumers, such as uncertainty around future employment,” said Mike Jervis, partner business recovery at PwC.
“The significant increase in insolvencies, particularly administrations, in the first quarter of 2011 is unwelcome news,” he added.
“Companies taking their eye off the ball will end up in next quarter’s stats.”
Insolvency trade body R3’s president Frances Coulson (pictured) agreed, adding: “The quarter-on-quarter increase in corporate insolvencies may seem surprising given that we saw the economy grow during this quarter; however, our research shows that the first stages of recovery are the most difficult time for businesses.
“Creditors tend to become more aggressive in their pursuit of debtors once there are signs of growth.”
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