The best Insolvencies are constructive
The latest Government statistics on corporate insolvency are available at: https://www.gov.uk/government/statistics/insolvency-statistics-october-to-december-2015--2
Mercer & Hole’s experience of formal insolvency appointments mirrors the downward trend in the Government figures, but the detail of our work is revealing.
We have four of the country’s 450 active appointment taking insolvency licence holders. The Government figures suggest that a practice of our size should deal with an administration, on average, once a month and a Company Voluntary Arrangement (CVA) every four months. Yet we have been involved in two CVAs proposed in the last two months (four times the average) as well as having been appointed in two administrations.
Although corporate insolvencies as a whole are declining, value can be added using the more constructive insolvency mechanisms, as we do in administrations and CVAs. The underlying business and potentially the company itself can continue, and we can often avoid the significant loss of value that might arise in liquidation.
Our focus on restructuring, and using formal insolvency procedures constructively when necessary, appears to be resonating with the market, keeping us busy in maintaining and creating value.
A key factor in a successful restructuring is for advice to have been sought early. Let us know if you are aware of a situation where such advice is needed.
Date: 4th February, 2016
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