Why is this important?
New figures released from the Accountant in Bankruptcy (AiB) – Scotland’s Insolvency Service – show that there has been an 8.1% increase in the total number of corporate insolvencies from the same period a year ago. This includes receiverships, court liquidations and creditors’ voluntary liquidations but not members’ voluntary liquidations (MVL).
Drilling down further into these categories there has been a 34.2% increase in compulsory liquidations over the same period and a 15.1% increase in MVLs.
Overall there were 966 corporate insolvencies in 2018-19, up from 884 the previous year.
The AiB develops policy for certain aspects of corporate insolvency and is responsible for receiving and recording information on liquidations and receiverships of Scottish businesses held in the Register of Insolvencies (RoI).
The RoI contains details of liquidations and receiverships of Scottish businesses which are wound up in either a Sheriff Court or the Court of Session, which is Scotland’s supreme civil court. AiB is also required to be notified of all company liquidations and receiverships in Scotland.
Duncan Swift, vice-president of R3, the insolvency and restructuring trade body, said: “The jump in the number of corporate insolvencies in Scotland in the last quarter continues a long-standing trend, and indicates that many companies are finding market conditions tough at the moment.
“Many distressed companies, especially in the retail and restaurant sectors, will have put their heads down and tried to get in as much cash as possible over the busy festive period – leaving difficult conversations about future options to the cold light of the New Year.
“Although GDP growth in Scotland in the final quarter of 2018 outpaced the UK as a whole, its expansion rate of 0.3% is still relatively sluggish, and masks a fall in the production sector’s output of 0.9% over the same period.”
Seeking further advice?
With the new insolvency rules being introduced in Scotland on 6 April 2019, the accessibility to the processes for companies has largely been improved. Our fees for a scottish liquidation range between £3,150 – £4,500 plus VAT depending on the complexity of the case.
Contact our BusinessRescueExperts today if you require further advice.