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Around the insolvency world

Thoughts after a conference call amongst hww international cooperation partners*

Formal insolvency is out of fashion in Western Europe as a result of low interest rates, banks’ reluctance to precipitate formal procedures and few assets remaining in the insolvencies that do happen. Regionally there are certain industries producing more restructuring and insolvency work, with healthcare inefficiencies failing to cope with ageing populations and fears for the automotive sector following the VW scandal.

Globally, the shipping, offshore oil and commodities sectors are displaying signs of weakness and these are especially visible in South East Asia, where insolvency practitioners are busier than ever as a result of relative economic instability in Indonesia and China. Litigation as a result of fraud is also buoyant.

Away from Asia, offshore jurisdictions (often litigation focussed) are reporting mixed activity levels – quieter in the Caribbean and more active in the Channel Islands.

Elsewhere, the relatively new rescue procedures introduced in various Eastern European countries are bedding in slowly while the levels of non-performing loans in that region’s banks are higher than the IMF would like.

Finally, the political crisis and recession in Brazil is keeping its insolvency practitioners as busy as they have ever been.

These observations illustrate that company life cycles continue, influenced by a variety of factors.  Whether the emphasis in a particular place at a given time is on recycling businesses and assets through formal insolvency or on avoiding the value hit inherent in formal procedures, the requirement for skilled and experienced restructuring professionals remains.

Stressed or distressed businesses often involve more than one country. Those of us who work and network across jurisdictional borders remain ideally placed to solve their problems.

*Chris Laughton is the UK's independent insolvency professional member of hww international cooperation partners, who operate in 35 jurisdictions around the world.

 

 

Date: 4th November, 2015
Author: Chris Laughton

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