Company Insolvencies on the increase
1 July 2011

Figures published by the AIB showed a significant increase in the first quarter of 2011/12. In percentage terms total corporate insolvencies increased by 17% in the first quarter of 2011/12 compared to the previous quarter and by 13% compared to the same quarter in 2010/11. These percentages are potentially worse than they look on the face of it as the figures include a 69% drop in receiverships in Quarter one compared to the previous quarter and an 82 % drop as against quarter 1 in 2010/11.

Compulsory liquidations showed a 26% increase against the previous quarter and creditors voluntary liquidations an increase of 7%.

The rise in liquidations should act as a reminder to creditors to maintain their credit control procedures. Allowing debts to accrue without taking action can result in a loss if the debtor is sequestrated. The old adage that the earlier action is taken to collect a debt the better applies even more nowadays.