News: Moorhead Savage on compulsory liquidations
Rotherham insolvency expert Paul Moorhead is offering advice to firms in financial trouble after seeing an increase in the number of compulsory liquidations in the UK.
Statistics just published by the government's Insolvency Service reveal that there has been a sharp increase in the number of firms being wound up by creditors in the past three months.
The number of compulsory liquidations, where a creditor asks the courts to close down a business due to non-payment of debts, increased by nearly 20 per cent compared to the previous quarter.
Paul, a licenced insolvency practitioner with Moorhead Savage, based in RiDO's Moorgate Crofts business centre, said: "This is a worrying trend, showing that many firms are struggling to pay their way in the continuing economic gloom.
"Creditors are becoming impatient – many will be suffering with their own financial problems - and they are increasingly prepared to follow through on threats to wind up businesses that cannot afford to pay their bills."
"While it may be tempting to keep making promises of payment to creditors, when those promises are broken the consequences can be catastrophic.
"The good news is that there are ways of dealing with mounting debts that will allow the company to continue and the sooner that a business owner takes advice, the more palatable the options that are available."
In particular, a Company Voluntary Arrangement (CVA) can be put in place with the help of a licensed insolvency practitioner to protect the company from legal action whilst a turnaround plan is followed, allowing a company to recover from its cash-flow problems.
In recent months, Moorhead Savage has set up three CVAs for businesses in the Sheffield City Region, safeguarding dozens of jobs in the process.
Moorhead Savage website
Images: Moorhead Savage
Statistics just published by the government's Insolvency Service reveal that there has been a sharp increase in the number of firms being wound up by creditors in the past three months.
The number of compulsory liquidations, where a creditor asks the courts to close down a business due to non-payment of debts, increased by nearly 20 per cent compared to the previous quarter.
Paul, a licenced insolvency practitioner with Moorhead Savage, based in RiDO's Moorgate Crofts business centre, said: "This is a worrying trend, showing that many firms are struggling to pay their way in the continuing economic gloom.
"Creditors are becoming impatient – many will be suffering with their own financial problems - and they are increasingly prepared to follow through on threats to wind up businesses that cannot afford to pay their bills."
"While it may be tempting to keep making promises of payment to creditors, when those promises are broken the consequences can be catastrophic.
"The good news is that there are ways of dealing with mounting debts that will allow the company to continue and the sooner that a business owner takes advice, the more palatable the options that are available."
In particular, a Company Voluntary Arrangement (CVA) can be put in place with the help of a licensed insolvency practitioner to protect the company from legal action whilst a turnaround plan is followed, allowing a company to recover from its cash-flow problems.
In recent months, Moorhead Savage has set up three CVAs for businesses in the Sheffield City Region, safeguarding dozens of jobs in the process.
Moorhead Savage website
Images: Moorhead Savage
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