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Friday, 2 November 2012

Insolvencies down 25% on last quarter has been reported widely.

This statistic comes as no surprise to many in the turnaround profession. Figures from the Insolvency Service show that 986 firms went into administration, receivership or a company voluntary arrangement in the third quarter of this year.  That was a 25% drop on the previous quarter.  This is not the whole story as liquidations that make up the largest type of insolvency procedure are down only 5.6% year on year.

R3, the insolvency trade body, warns about the "zombie" businesses that are just scraping by and paying only the interest on the debts and will get into serious trouble if the economy takes a turn for the worse.  The Telegraph business supplement ran an interesting feature on this phenomenon.  You can read it here.

The standard ran an excellent comment piece about the current market you can read it here 

Low interest rates and quantitative easing are definitely helping companies stay afloat.   However, the article didn't allude to the fact that HMRC are also not putting pressure on struggling companies probably, in my view, as they want to concentrate for the moment on companies and individuals that can pay but have found a way not to pay!

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