Drop in liquidations due to leniency
A surprising drop in third quarter liquidations is the 'calm before the storm' and is due to lenient treatment by creditors, especially the tax authorities, leading insolvency experts have claimed.
Kroll Buchler Phillips partner Simon Wilson said insolvencies fell but there was a flurry of restructuring activity in the background, as clearing banks caught ‘problem cases’ early.
According to the latest figures from the National Statistics Office, insolvencies dropped by 21% in the third quarter of this year. Roger Oldfield president of R3, the association of business recovery professionals, says the fall in compulsory liquidations is due to the government’s lenience with businesses that have been affected by foot-and-mouth.
Recent outbreaks of the disease have caused fox hunts, such as the York and Ainsty, to keep their hounds behind bars.
Mick Loughlin of KPMG confirmed leniency was being shown. He said there had been far fewer liquidation petitions from Inland Revenue and Customs and Excise than in previous years.
PKF’s managing partner Martin Goodchild said that banks are now more interested in company turnaround.
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