The Insolvency Service today published their statistics for the number of company insolvencies for the 1st quarter of 2009.
These show that there were a total of 4,941 liquidations in England and Wales (an increase of 56% compared to a year ago).
Of these, 1,579 companies were wound up by a court (an increase of 43.6% over the year) and 3,362 companies put themselves into liquidation (an increase of 62.5% over the year).
From our experience, the main cause of liquidations is cash-flow problems or disputes. More and more companies are raising disputes at the moment and, unless managed effectively, they can drain the life-blood out of a firm.
If companies followed our credit control guidance and took early legal advice as soon as a dispute raised its head, these statistics could certainly be a lot lower. There has certainly never been a more important time for dealing with disputes at the outset before they escalate.
Gary Cousins
Insolvency and Dispute Management Solicitor
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