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Saving For a Space Ship

Corporate Liquidations Up 10.5% In Q2 2013

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http://www.insolvencynews.com/article/15709/industry/corporate-liquidations-up-in-q2-despite-quieter-insolvency-climate

....The Insolvency Service (IS) revealed the total was made up of 961 compulsory liquidations, down 6.6% on the previous quarter, and 3,017 creditors’ voluntary liquidations, up 17.3% on the first quarter of 2013.

There were 974 other corporate insolvencies during the second quarter of 2013, comprising 192 receiverships, 622 administrations and 160 company voluntary arrangements.

The top line figures represent a 25.6% decrease in corporate insolvencies on the same period in 2012, although this was influenced by the high number of CVA’s during the second quarter of 2012 (352).

Richard Hodgson, insolvency partner at Linklaters, said: “Few expected today’s figures to show a significant uplift in insolvencies.

“Low interest rates and favourable credit conditions mean that businesses are able to survive, although many are just treading water unable to grow or invest.

“It remains to be seen whether the insolvency lag of previous recessions – where insolvency levels increase as the economy recovers – will be repeated this time around seeing many of those zombie firms go under.”

Dan Butters, restructuring partner at Deloitte, said: “A key challenge to businesses is being able to fund expansion as any recovery gathers momentum.

“This could be an insurmountable challenge for the most extreme cases of ‘zombie businesses’, those unable to invest or expand, and which have so far avoided formal insolvency procedures.....

Edited by Saving For a Space Ship

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