COMPANY INSOLVENCIES have declined 6% compared to a year ago government statistics show.
Corporate insolvencies fell to 1,232 for the second quarter of the year, a 6% decline compared to the same period in 2010 the Insolvency Service statistics show
Administrations also dropped to 695 compared to 782 in the last quarter and 777 a year ago.
Liquidations continued to increase to 4,233, a 2.7% jump on the last quarter and a 4.4% spike compared on the same period last year.
“The sharp spike in compulsory liquidations reflects the more aggressive stance of the Revenue, which is now calling in its debts and forcing struggling companies into a formal insolvency process,” said Brian Johnson, an insolvency partner at HW Fisher.
“This is the beginning of the end for the thousands of zombie companies out there.”
Insolvency professionals are predicting the retail sector will be hit hard over the coming months due to a slump in consumer confidence, as well as the Eurozone crisis’ likely impact on export markets.
“All this shows we have a long, hard road ahead…There certainly won’t be a sustained drop in company insolvencies,” said Andrew MacCallum, MD of Alvarez & Marsal.
Individual insolvencies have begun to increase with 30,513 debtors entering into bankruptcy, debt relief orders or individual voluntary arrangements.
This is an increase on the last quarter with a reported 30,145, but a decrease on the 34,743 seen a year ago.
Bankruptcy levels fell from 12,539 in the first quarter to 11,113 in the second quarter.
“The cost of filing for bankruptcy currently stands at £600 – this is not an insignificant amount, and as a result we are seeing more people do everything they can to avoid bankruptcy,” said Louise Brittain, partner in Deloitte‘s insolvency team.
Insolvency trade body president Frances Coulson (pictured) believes these figures are set to rise as high inflation and increased living costs continue to spiral upwards.
“The increase in personal insolvencies is likely to continue … this may be the start of a worrying trend,” she said.
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies
Smith & Williamson has been appointed administrators of charity 4Children