Posted by Stewart Wilkinson, Partner
Figures show an increase in company insolvencies
The number of companies that went into insolvency rose at the start of the year, new figures reveal.
In total more than 3,600 businesses found themselves in this position in the first quarter of 2016, with 804 of these made subject to a compulsory winding-up order.
This was up on the figures for the final three months of 2015 but still down on the corresponding quarter in 2015.
It is thought that a cull of so-called “zombie businesses” following the Christmas break is likely to be responsible for the increase.
Insolvency trade body R3 said the statistics suggested that businesses are, in some cases, coming under greater pressure.
Phillip Sykes, the organisation’s outgoing president, said: “Corporate insolvency numbers last rose at the start of 2014, and despite the rise this quarter, numbers are still well below where they were this time last year. However, UK businesses are starting to have a tougher time than they have had over the past few years.
“It should be noted, though, that the rise is driven by compulsory liquidations which indicates that creditors, probably including HMRC are beginning to lose patience with customers who are not paying their debts.
“At the same time it is interesting to see that the estimated liquidation rate is at its lowest level since comparable records began in 1984, this is a sign of the continuing strength of the economy.”
At Royds our dispute resolution team has a wealth of experience representing clients in cases involving complicated insolvency laws. For more information please visit or contact Stewart Wilkinson or Ashok Patel.
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