Belfast Telegraph

Company failures are down 42% but lead to a shortfall of £89.6m

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Bankruptcies and company liquidations fell by 18% and 42% respectively, while debt relief orders increased by 37%
Bankruptcies and company liquidations fell by 18% and 42% respectively, while debt relief orders increased by 37%
Ryan McAleer

By Ryan McAleer

The number of businesses liquidated in Northern Ireland fell by 42% last year, new Government figures show.

But the report from the Department for the Economy's Insolvency Service has revealed that the companies which went into compulsory liquidation here during 2017/18 left a shortfall of £89.6m.

It estimated that just £5m was recovered from the £94.6m of liabilities linked to 153 companies, leaving the average shortfall for each case at around £585,000.

The greatest number of company failures over the 12 months occurred in the finance and business services sector (35), just ahead of construction on 33.

The former includes insurance, accounting and legal services firms, as well as real estate, computer services and management services.

There were 20 winding up orders for both the retail and hotels and catering sector.

Overall, new cases of insolvency in Northern Ireland fell for the fourth consecutive year in 2017/18 and to their lowest rate since 2009/10.

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The total number of new bankruptcies, liquidations and debt relief orders fell to 1,476 in 2017/18, having reached an all-time high of 2,177 in 2013/14.

Bankruptcies and company liquidations fell by 18% and 42% respectively, while debt relief orders increased by 37%.

Richard Monds, director of the Northern Ireland Insolvency Service, said the trend reflected an improving picture for the economy.

"This steady decrease in recent years is indicative of the resilience of local businesses amidst tough conditions," he said.

"There are, however, many complex and diverse factors that can cause insolvencies at both corporate and personal levels. The Insolvency Service ensures that the various forms of insolvency are discharged effectively, and puts in place debt recovery measures where appropriate.

"This in turn helps foster confidence within the business community."

He said the Insolvency Service also investigated cases of reckless conduct, and could issue restriction or disqualifcation orders.

"We took enforcement action in 72 cases in 2017/18 - an increase of 14% on the previous year. These orders place a ban on those who receive them from running a business and act as a strong deterrent to prevent misconduct," he said.

Belfast Telegraph

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