Rate of closures jumps 14% as 34 Irish firms folding every day

ALMOST 37 firms are closing down ever day, an increase of 14% on last year.

This comes as figures show the value of court judgments for the recovery of unpaid debt hit €14 million in the second quarter of this year, up 55% on last year.

According to ICC Information, the construction sector accounted for the largest number of court judgments filed – €4.6m.

The difficulties in this sector were further highlighted with judgment totalling €1.1m in real estate and renting. Companies involved in business activities were the second highest offenders, accounting for 19% of all judgments, totalling just under €3m. This is up 19% on last year.

Dublin-based companies accounted for the majority of judgments, with €5.3m.

Cork accounted for 13% of judgments with a value of €1.8m. Kerry accounted for just 2.4%, with a value of €343,281.

Leitrim-based companies saw the biggest increase when compared to quarter two with a growth of 849% and a value of €60,000.

All but seven counties saw the value of court judgments increase compared to the same period in 2009.

“Court judgments are a massive indicator of a company’s financial health but also of the economy’s health,” said head of risk management, Paula Carney.

“Some 23% of all those companies that called creditors meetings in quarter one 2010 had at least one court judgments against them and so companies need to be mindful when extending credit to companies.”

No county in Ireland has been left untouched.

“As we try to get back on the road to recovery, it is essential that companies be more vigilant when doing business and ensure that they are only dealing with creditworthy companies, therefore decreasing the likelihood of them incurring a bad debt,” said Ms Carney.