Insolvency figures do not show real picture in Lancashire warns specialist
Government figures which show a fall in business insolvencies in April do not reflect the true impact of the coronavirus pandemic, according to the insolvency and restructuring trade body R3
The figures show that corporate insolvencies in England and Wales were down by 17 per cent on April last year.
Allan Cadman, North West chairman of R3, said he welcomed the Insolvency Service’s decision to publish monthly rather than quarterly figures, but said this first set did not yet provide a clear picture.
He explained: “Some corporate insolvency procedures take time to get underway, while the changes to the normal operating of the courts have meant many civil proceedings have been halted.
"The Government’s support measures for businesses have undoubtedly helped many stay afloat. Additionally, companies which planned for disruption in the case of a no-deal Brexit may find their preparations coming in handy.”
He added: ““Our members are telling us the enquiries they are receiving are mainly for advice and support, rather than necessarily for COVID-induced insolvency processes.
Directors want to understand how to manage their cashflow and what options are open to them operationally, consumers want advice, and both groups want to understand the finer points of the Government’s support measures and what they mean for their circumstances.
“Corporate insolvency procedures which have been initiated since the pandemic hit are mostly companies which were already in financial distress pre-lockdown, for whom the freezing of normal operations delivered a final blow.
“Now more than ever, anyone worried about their own or their company’s financial situation should seek advice urgently, from a professional and reputable source. With ‘business as usual’ an unknowable way off, making plans to navigate the disruption the pandemic has caused will be vital.”