Insolvency statistics - don't become a number says Moore Blatch
The full effects of the credit crunch are now being seen in the south with rising insolvencies which show no signs of abating.
Mark Osgood, partner and insolvency expert at south coast law firm Moore Blatch, says that latest figures from the Insolvency Service reveal a 56 per cent increase in liquidations from January to March compared with the first quarter of 2008.
“We expected the numbers to be high for the first quarter of this year and while we predict this trend to continue we are urging companies to act now and avoid becoming one of these statistics,’’ said Mark.
And he said measures announced in the recent budget may provide, when implemented fully, some respite for medium and large enterprises at a vital time in the economic cycle.
“Until now, only small companies have been able to seek a moratorium on creditor action while they seek to deal with their creditors but, the proposals provide, if approved, for such a moratorium to apply to medium and larger companies as well,’’ said Mark. “In addition, we have seen proposals to encourage investment in struggling companies.”
“If implemented, the proposals will provide valuable breathing space and will encourage investment in companies which could provide that vital lifeline in these difficult economic times. However, we are advising companies that taking action as early as possible will give them the best chance of avoiding becoming an insolvency statistic.’’
Mark said the easiest way to become a statistic is for businesses to bury their heads in the sand and hope that economic fortunes will improve and safeguard their future.
“This is absolutely not the case and while there are reports of green shoots in some areas there is still no evidence of a great upturn.’’
He said the shrewd business bosses are those who are regularly monitoring order books, overheads and taking action early to safeguard their core business – with business advisors key to identifying the best way forward.
Mark Osgood heads a team of experts that deals with all aspects of insolvency.