9 August 2010 | Angeline Albert
The number of companies in England and Wales declared insolvent fell by 19.1 per cent in the second quarter of this year when compared with the same period a year ago.
According to a report published by the Insolvency Service, there were 4,080 compulsory liquidations and creditors’ voluntary liquidations in England and Wales between April and June.
This is a drop of 961 company insolvencies when compared with 2009’s second quarter figure of 5,041.
The number of firms entering administration was recorded as 777 – down 24.3 per cent on the same period a year ago.
Despite the slowdown in the number of insolvencies, some legal experts are bracing themselves for further problems ahead, as suppliers and contractors to the public sector suffer the knock-on effects of the spending cuts.
A spokesman for the Insolvency Service said: “June’s emergency Budget set out the next steps for how we deliver growth in our economy and tackle the deficit. This includes supporting business and enabling viable businesses facing temporary difficulties to turn themselves around.” He added that the Insolvency Service published a consultation at the end of July on proposals for a new restructuring moratorium.
The moratorium gives companies the option of breathing space in which to negotiate with creditors and reorganise business affairs.
The consultation ends on 18 October.