Company liquidations down 19%

There were 4,080 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the second quarter of 2010, an increase of 0.5% on the previous quarter but .

This was made up of 1,169 compulsory liquidations, which are down 9.9% on the previous quarter and down 21.0% on the corresponding quarter of the previous year, and 2,911 creditors voluntary liquidations, which are up 5.4% on the previous quarter and down 18.3% on the corresponding quarter of the previous year. 

In the twelve months ending Q2 2010, approximately 1 in 127 active companies went into liquidation, which is a slight decrease from the previous quarter, when this figure stood at 1 in 120. 

Additionally, there were 1,311 other corporate insolvencies in the second quarter of 2010 comprising 302 receiverships, 777 administrations and 232 company voluntary arrangements.  In total these represented a decrease of 14.3% on the same period a year ago. 

There were 34,743 individual insolvencies in England and Wales in the second quarter of 2010. This was an increase of 5.0% on the same period a year ago.

This was made up of 14,982 bankruptcies, which were down 20.6% on the corresponding quarter of the previous year, 13,466 Individual Voluntary Arrangements, which were up 10.2% on the corresponding quarter of the previous year and 6,295 Debt Relief Orders.

In the second quarter of 2010, 85.7% of bankruptcies were made on the petition of the debtor, comparable to the levels for recent quarters.  The percentage of bankruptcy orders involving trading debts was 12.7% in the first quarter of 2010, similar to the level for 2009 as a whole.

Brian Johnson, an insolvency practitioner at HW Fisher & Company chartered accountants, says: “Britain’s businesses are limping on like a wounded army in retreat. Although the main of the army is intact, it is losing people along the way.

“It is still difficult to see how we are going to get out of the rut that we are in, as many companies still cannot get the finance they need to survive.

“The fact that the banks are returning good numbers and improving their balance sheets will count against struggling companies rather than benefit them. Once banks are more confident, they will more readily remove funding on businesses they do not feel to be viable.

“We expect the number of corporate insolvencies to be far higher in the fourth quarter and to continue rising into 2011.”