Firms warned against being complacent about insolvency - Royds Withy King Solicitors

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2 March 2015 0 Comments
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Firms warned against being complacent about insolvency

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Insolvency trade body R3 has devised a five-point plan to give businesses the best chance of keeping their head above water in the first three months of the year. The period is traditionally the most challenging for companies and statistically …

Insolvency trade body R3 has devised a five-point plan to give businesses the best chance of keeping their head above water in the first three months of the year.

The period is traditionally the most challenging for companies and statistically the time of year when businesses are most likely to become insolvent.

Since their peak in 2008, corporate insolvencies have only risen four times from the previous quarter, with three of these rises taking place at the start of the year. R3 said firms should beware of “over-trading”.

It said: “Insolvencies usually peak after recessions, not during them.

“There are several reasons why recovery can trip up a business – orders might come in quicker than a business can handle; finance might not be available to keep pace with expansion; and businesses might expand before they’re ready to do so.

“Businesses need to be aware of the risks of recovery and should not grow complacent.”

The group said late payment was also a major factor in a fifth of insolvencies and it was vital that companies got paid for the work that they did.

At Royds, our Dispute Resolution team are highly experienced in using insolvency process and the court system as a debt recovery strategy. We have particular expertise in drafting and effective service of statutory demands and defeating debtors’ applications to set them aside. For further information on our services, please visit our website or contact Stewart Wilkinson.

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