Urgent call to revive or remove 'zombie' companies
The Executive is being urged to help some of Northern Ireland's thousands of 'zombie firms' back to life – and others into the grave.
A 'zombie company' refers to an insolvent business where there is no formal rescue or recovery exercise procedure in progress.
Walter Lismore, a licensed insolvency practitioner, said that while some of the companies could be 'salvaged' and the local economy boosted, others need to be removed from the system.
Mr Lismore said the current survival of so many zombie companies is only happening due to current low interest rates, understanding creditors and bank reluctance to take precipitative action.
"There may be as many as 7,000 zombie businesses, approximately one in six of all Northern Ireland limited companies registered at Companies House. This is 60% higher than the reported average number of UK zombies," he said.
"Nobody wants to see a company fail or be placed in liquidation and the sooner that advice is sought and obtained, the business may be saved.
"I've written to the Executive to raise these concerns and hope it can debate the zombie issue as a matter of priority. In Northern Ireland, we are seeing accounts filed that are not just technically but substantially bust.
"In reality, many of these companies are in critical financial distress despite a healthier economic picture that is being promoted in Great Britain."
He added that there is a misconception that the recession has significantly increased the number of company liquidations, but this is not being reflected by the number of company failures over the past few years.
"The removal of these zombie companies would reduce a developing negative perception of the Northern Ireland economy," he said.
"The removal of these burdens from the economic system will have to be addressed sooner or later.
"The majority of the zombie companies most likely cannot be rescued and businesses must recognise the losses and these will have to be provided for and written off.
"Until we remove these bad debt units from the economic system, we may continue to fool ourselves into believing they do not exist or are unimportant to the Northern Ireland economy," he added.
Approximate number of 'zombie' businesses in Northern Ireland