Surge in company liquidations likely before end of year, agency reports

THE final two months of the year are likely to see a surge in company liquidations, according to business information and risk agency Vision-Net.ie.

Such a trend would likely take to more than 1,500 the number of companies that have gone into liquidation since the beginning of 2010.

In addition, the year to date has seen 33 cases of examinership and 302 receiverships. The number of liquidations – high street retailer, Pulse Accessories, being the latest high-profile one – currently stands at 1,462, albeit down 12% on the corresponding timeframe in 2009.

The data and grim prediction comes from Vision-Net’s latest business barometer, which also suggests that early figures for October hint at a 17% year-on-year rise in liquidation cases.

“Although there has been a slight drop in the overall liquidations, we expect there to be a surge between now and the year-end. This is confirmed by the increase in the appointments of receivers and a decrease in companies filling corporate solvency documents over the past four weeks,” said the company’s managing director, Christine Cullen.

The new survey also claims that companies that have gone into liquidation this year have left unpaid debts to the tune of €1.1 billion, almost all of which were unsecured.

Commenting on the unpaid debt question, Ms Cullen added: “The fall-out from this will be played out at creditor meetings with suppliers and businesses fighting for fractions of what are owed. This underlines the importance of evaluating risk before making a business decision.”

Vision-Net is also claiming that liquidations are only showing part of the picture of the real economy – adding that an average of 37 companies are closing on a daily basis, amounting to nearly 11,000 actual business closures this year to date. Of that figure, only around 20% are thought to be voluntary closures, meaning that 80% have resulted on the back of unpaid debts and liabilities.