Fewer creditors than ever before are forcing struggling companies to go into liquidation, new research suggests.
A survey by leading Sheffield insolvency and business turnaround specialist Graywoods shows a sharp decrease in the number of creditors using winding up petitions to enforce debts.
Analysis of the latest Government statistics demonstrates that 2,807 companies were wound up by the Court during 2017, a fall of 50 per cent since 2009.
The number of voluntary liquidations entered into last year, however, rose by 6.3 per cent.
“Over the past ten years there has been a steady decline in the number of companies that are being wound up by their creditors,” said Graywoods director Deborah Lockwood.
“However, many companies are still affected by winding up petitions, with at least 5,111 being presented and advertised in the London Gazette last year.
“What we can’t be certain of is how many petitions are presented by not advertised as the debt is settled before the petition is heard by the Court.”
Deborah added that the clear message to directors of struggling companies was that there is a range of options available to ensure a company can be turned around or rescued, even when a creditor has lost patience and has petitioned for the company to be wound up.
“The sooner directors take advice, the more options will be available and the more options will be available and the more palatable those options will be,” she said.
“We specialise in Company Voluntary Arrangements, which can be proposed even after a winding up petition has been presented by a disgruntled creditor.
“If a CVA is accepted by creditors, usually on the basis that they will get a better return by the company continuing through the CVA rather than being wound up, the Court will dismiss the winding up petition and the company can continue to trade with a sustainable plan to deal with its historic debt.”
For further information visit www.graywoods.co.uk