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INSOLVENCIES ON THE RISE

According to the Midlands branch of insolvency and restructuring trade body R3, a month-on-month rise in the number of corporate insolvencies in England and Wales indicates that businesses which were healthy and profitable pre-Covid are now starting to struggle. The government’s Insolvency Service figures show that the number of companies entering insolvency increased to 926 in September 2020, compared to August’s figure of 784.

R3 Midlands chair Eddie Williams, a partner at accountancy firm Grant Thornton in the East Midlands, commented: “The latest statistics are something of a reversal of a downward trend in corporate insolvency numbers post-lockdown and have been driven by an increase in the number of Creditors’ Voluntary Liquidations and, to a lesser extent, Company Voluntary Arrangements. The figures are only now beginning to demonstrate the toll that Covid-19 is taking on once-healthy businesses, with many companies profitable at the beginning of the year starting to struggle for the first time due to the pandemic.”

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