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Firms urged to watch for signs of distress as corporate insolvencies double

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Directors of the region’s businesses need to be alert to signs of financial distress after the number of firms going into insolvency across the country doubled in April, says insolvency & restructuring trade body R3.

Insolvency Service figures show that registered company insolvencies in England and Wales leapt to 1,991 in April up from 925 in the month last year and above pre-pandemic levels. They were driven by an increase in creditor voluntary liquidations. R3 Eastern chair Alistair Bacon, founding principal at AMB Law in Ipswich, said: “The boom many were hoping for when pandemic restrictions ended simply hasn’t happened. The UK has moved from one damaging set of economic stressors to another with no time to draw breath.”

He added: “Despite such serious challenges, the number of administrations suggests that there are several insolvent businesses which still have some prospect of rescue, given this is one of the main statutory purposes of the administration process...Now is the time for directors to be alert to the signs of financial distress and to take the necessary action. We know how hard it is for a director to admit that their business is struggling, but seeking early professional advice is likely to result in a far better outcome than waiting and allowing the problem to spiral.”

Last Updated ( Thursday, 26 May 2022 07:48 )