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News : Irish Economy Last Updated: Dec 3, 2010 - 5:35:06 AM

Number of Irish company collapses in 2010 is expected to top 1,500
By Finfacts Team
Dec 2, 2010 - 2:33:57 AM

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The number of Irish company collapses in 2010 is expected to top 1,500 given the failure trend and the usual spike in numbers towards the year end.

Figures released today by InsolvencyJournal.ie reveal the number of companies in Ireland becoming insolvent has increased in November. 1,392 companies have gone bust from January to end of November 2010, an increase of just over 11% on the same 11 month period in 2009. The number of insolvent companies in November totaled 142, an increase of 24 on October totals of 118 and an increase of 21 on the same month last year.

Commenting on the figures, Ken Fennell, a partner in Kavanaghfennell, the firm who compile the data, said “The figures indicate that as predicted yearly totals are heading for 1,500 and traditionally the last quarter is the most active for insolvency activity”

Regionally, Leinster was the worst hit with a total of 90 insolvencies, 63% of the total for the month of November. Of this total Dublin accounted for 62, an increase of 16 on the total of 46 for October. Munster insolvencies increased from 25 in October to 39 in November with Cork being worst hit with 20, 50% more than the figure of 10 for October. Connaught had 8 insolvencies a decrease of 7 from October figures of 15 and Ulster increased from 2 in October to 5 for November.

The construction industry total increased again from 26 in October to 42 in November, the same figure as September and the third highest monthly total this year. In total, 419 construction companies have gone bust so far this year.

“Some high profile cases in the construction sector found themselves in difficulty and went out of business in November, these included such companies as Pierse Group & related companies and Michael McNamara & Company. Not surprising the construction sector continues to suffer the highest number of casualties,” Fennell said.

Other industries which showed an increase were the services industry from 22 in October to 34 in November and wholesale with 1 in October jumping to 8 in November. However there was a drop in both retail and hospitality insolvencies. Retail decreased from 16 in October to 12 in November, bringing the total so far this year to 168. Hospitality decreased 33% from 21 in October to 14 in November. The figure for insolvencies for the hospitality industry from January to November is 178.

There was a slight increase in the number of examinerships for November with 4 examiners appointed, up from the figure of 1 in October and 3 for November last year. Examiners were appointed to Farm Supply Stores Limited, Rockwell Constructions Limited, Cash Flow Services Limited and most recently Four Star Pizza.

The National Asset Management Agency (NAMA) is opposing the appointment by the High Court of an examiner to five companies in the Whelan Group, one of the biggest Irish concrete products suppliers, employing 120 people. The court will hear the petition for examinership on Friday.

NAMA has acquired some €50m in debts owed to Anglo Irish Bank by the Whelan companies and is objecting to examinership because of a proposed large writedown of the debts of secured creditors. Anglo was the largest secured creditor of the group, while Bank of Scotland Ireland is also owed some €12m.

The Whelan companies claim to have a consolidated deficit of about €10m as a going concern, rising to about €50m if placed in liquidation. They say if a survival scheme is approved, including cost-cutting measures, sale of non-core assets and outside investment, the group would return to profitability next year, when construction activity will remain at a very low level.

“Three out of four companies that went into examinership in November were trading companies and I believe you may see an increasing number of trading companies entering examinership over the coming months,” Fennell said.

There was also an increase in receiverships in November, up to 21 from 14 in October. The figure of 208 from January to November shows an increase of 91 receiverships (77%) from the same period in 2009 and an increase of 161 on 2008 totals.

“The significant year on year increase in receivership numbers indicate that banks are continuing to enforce their security where they believe they have no other option available to them,” Fennell said.

Kavanaghfennell said the receivership totals do not include personal asset receiverships as no public record is available so the figure may be somewhat distorted because of this.

The number of creditors’ voluntary liquidations (CVL) also increased last month, up to 107 from 91 in October. So far this year there have been 1,090 CVLs, compared to 1,000 and 497 for the same periods in 2009 in 2008, respectively.

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