Businesses ‘should still be aware of insolvency risk in 2010’

Posted 04/01/2010

Recession-hit businesses should continue to be aware of the threat of insolvency, despite recent signs of an economic upturn.

This is the view of the insolvency trade body R3, which told the Liverpool Daily Post that the benefits of the end of recession are unlikely to be felt by companies for several months.

The body stated that this is because of the depleted resources from which many firms are now suffering, as well as the increasing keenness of creditors to liquidate assets and aggressively pursue debts.

As a result, Matt Dunham, North West regional chair of R3, suggested that rates of insolvency are still likely to increase over the coming months.

He said: “Businesses need to be aware that the period just after a recession is a dangerous time.”

Last month, the Conservatives highlighted Insolvency Service figures which showed that more companies have gone bankrupt in the current recession than during the downturns of the 1980s and 1990s.