You’re an insolvency practitioner – you must be busy?
18 June 2020: We are, but not as you might think. Because of the current pandemic and the headline insolvencies (often retail), people think we must be very busy.
Companies continue to receive unprecedented levels of financial support at the current time. This is in the form of grants, loans, debt purchase agreements, business rates holidays, job retention schemes and statutory sick pay schemes. Whilst these funds continue to be paid out, the tidal wave of work that some might have expected us to see in the insolvency world is yet, if at all, to come.
Once companies’ funds are spent and/or they begin to reopen, we may start to see a rise in formal insolvency work. It isn’t cheap to re-open, re-stock, re-train, test and conform in order to trade in today’s new normal and many of those costs are exceptional and unplanned. The government are treading a fine line between rescuing the economy with preserving our health and our lives. One of the last sectors to open is likely to be indoor leisure such as pubs, restaurants, cinemas, etc. and one must question whether they can trade profitably with a two metre self-distancing rule. We expect that will reduce to one metre very soon if it hasn’t already by the time this comes to print.
So yes, we are busy, busy talking to business owners about how to prepare and plan for re-openings, how to manage cash flows and how to avoid using the insolvency side of our offering. Our work has been focussing on preventative measures/recovery. But, for some, they will need to rely on us for restructuring, rescue and planned closure and we are here to guide them through the process should they need to take that decision.
Our economy appears to be moving towards a gradual reopening and, as a result, the focus of our work may well change again.
For your initial discussion that is free of charge, always in confidence and without obligation please call any member of the BRI Business Recovery and Insolvency management team.