Lessors continued to be plagued by client insolvencies in the
year’s second quarter, as figures released by the Insolvency
Service and law firm Freshfields Bruckhaus Derringer show the
aftermath of another relentless three months.
The second quarter of 2009 saw 5,055 corporate insolvencies in
England and Wales, 2.9 percent up on Q1 (4,914) and nearly 39
percent up year-on-year.
The number of companies put into administration also rose 9.5
percent year-on-year to reach 1,027, although this figure was 21
percent lower than Q1’s total of 1,311.
Adam Gallagher, a restructuring and insolvency partner at
Freshfields, commented on this last figure: “This may be the result
of businesses receiving a cash boost through the Christmas and New
Year sales which gave some retailers and others temporary health,
but this doesn’t mean that we should expect the same fall off
during the current quarter.
“Many of the businesses with critical liquidity problems will
already have sought insolvency protection leaving others to limp on
helped by the low interest rates.”
Gallagher continued to warn about prospects for the autumn,
which he said “could yet result in more misery for those companies
which, as a result of continuing poor performance, are unable to
arrest and remedy a breach in their lender covenants”.
The highest concentration of administrations during Q2 were in
the real estate sector, where 348 took place.
The financial services saw administrations increase by 36% from
11, while wholesale and retail trade saw a drop of 40 percent to
139. Construction administrations fell 8 percent to 111, while in
the manufacturing sector they fell 26 percent to 190.