Amazingly, in Scotland in 2007, only 6 companies were rescued by a company voluntary arrangement or CVA! I think that is staggering! It is a small country of course, but here are the 2007 statistics that shows the "Rescue Culture" has largely passed Scottish business and the insolvency profession by:
- 539 Scottish companies were liquidated and more than 81% were wound up by creditors and the Court. Only 18.7% were voluntary liquidations initiated by the directors.
- 75 entered administrative receivership and only 37 were restructured through the Government's preferred rescue tool - administration!
- As for CVA only 6, yes you read that correctly SIX were saved by the CVA tool which is scandalous waste of good businesses. Incidentally HMG also wants more companies to use CVA!
- CompanyRescue wrote 4 CVA's in Scotland last year or 75% of the total approved.
- Of the total stock of Scottish insolvencies of 657, some 66.66% were aggressive liquidations by creditors
- Taking Administrations and CVA's as "rescue" tools only 6.5% of all Scottish insolvencies were rescued. Less than 1% used a CVA.
- BURIAL accounted for 93.5% of all Scottish Insolvencies.
So the standard approach in Scotland seems to be - if a company is struggling, whack in a winding up petition and knock the company over. Is this so that the so called "corporate recovery" experts can feed their hungry mouths?
Any views on these statistics would be welcomed.
We are doing all we can to help Scottish businesses: this year we have had 3 CVA's approved and are currently working on 3 more. If your client is a Scottish registered company make sure they are aware of CVA!
Source of Statistics is the Insolvency Service see below.