Building and manufacturing sectors hit hard in efforts to recover unpaid debt

THE number of court judgments against companies for the recovery of unpaid debt has ballooned to €9.1 million for the first six months of 2009.

This is a rise of 74% on the same period in 2008, despite the fact the number of court judgments has decreased from 486 to 364 for the same period.

The figures, compiled by the Inter Company Comparisons (ICC) Information, show that the construction and manufacturing sectors accounted for 29% each in value of all the court judgements in the second quarter of 2009, followed by real estate on 9.4%.

The difference between 2009 and 2008 is already quite marked for the first six months of this year.

In 2008, there was €23.6m in court judgments awarded against Irish companies.

However, for the first six months of this year, €18m has already been awarded.

Not surprisingly, Dublin companies accounted for the majority of judgments, at over 47%, followed by Cork, 9%, and Limerick, 7%.

Companies in Leitrim, Carlow, Laois and Clare were the lowest offenders.

Comparing the second quarter in 2009 with the same period last year, the counties that saw the biggest increases in court judgments were Dublin, Monaghan, Limerick and Donegal, which all saw increases of over 200%.

Leinster saw the greatest rise in the value of court judgments issued, with nearly €6m lodged for the second quarter of this year. However, while Munster and Ulster also had increases, Connaught actually saw a significant drop in both the number and value of court judgments issued for the same period.

Head of business and account development at ICC Information, Michael Gannon, said the trend of increasing judgments in number and amount against struggling companies looks set to continue.

“Court judgments against companies are a useful barometer of corporate financial health and a leading indicator of insolvencies.”

“In 2008, there was a total of €23.6m in court judgments against Irish companies. In the first six months of 2009 we have already seen €18m and this trend looks set to continue,” he said.