6 August 2020: From BRI’s perspective, the results recently published confirming that company insolvencies in England and Wales fell by 25% compared to same period in 2019 is not a surprise. Whilst the Insolvency Service does not record whether an insolvency event is directly attributable to the COVID-19 pandemic, the reduction in numbers is clearly a result of Government financial assistance and also creditors’ forbearance on recovering sums owed.
Whilst creditors’ voluntary liquidations are the most common form of company insolvency, these were down by 24%. The most notable reduction is in compulsory liquidations with just 195 orders being made compared to 797 in Q2 2019. This is firmly attributable to the Courts reducing their operational times.
Company Voluntary Arrangements (“CVA”) reduced by 49%. Again, this is not surprising given most CVAs are based on contributions from profit over a number of years. Clearly, forecasting any future profit is somewhat difficult.
Since UK lockdown on 23 March 2020, BRI have advised many companies regarding their financial position and have assisted directors in finding alternative measures to avoid a formal insolvency event.
Please contact any one of the management team at BRI to see if we can assist your company to recover and not be included in the next statistical update.