Distressed Business in the North West

Over the last couple of weeks there has been two very interesting reports made about ‘distressed businesses’. The first concerns the underlying improvement to the number of North West businesses now considered to be in ‘significant’ finance distress then they were some 12 months earlier

Secondly, another item surfaced in the press about corporate deals involving distressed businesses.

In respect of corporate deals occuring under ‘distressed’ conditions, one such example is the NW based, top 100 UK law firm Halliwell’s which was recently announced to be undergoing a sell off to its competitors in the wake of financial collapse. Interestingly, all but one of Halliwell’s competitors set to benefit from the break up by buying parts of the business, featured lower than the failed firm in the UK’s Law Firm Top 100 rankings.

According to research from R3, the Association of Business Recovery Professionals it found that of the 1500 or so UK mergers and acquisitions conducted in the first half of this year, one in ten of those deals involved a ‘distressed’ business.

The total value of the distressed deals amount to some £500m

By contrast, according to recent statistics from restructuring specialist’s, Begbies Traynor, there was a 41% drop in North West businesses earmarked to be suffering from ‘critical’ problems and a 21% year-on-year drop in those facing ‘significant’ problems.

Companies with ‘significant’ problems are classed as those facing either a court action and/or poor, very poor, insolvent or out of date accounts. Critical problems are those companies with CCJs totalling £5,000 or more and/or winding-up petition related actions.

Whilst the North West has seen a marked drop, nationally however, Begbies Traynor says there has been a £14.5bn rise to £69.5bn in the value of liabilities at risk between the first and second quarter of this year. It is widely feared there may be a fresh surge in insolvencies, as public sector cuts hit already ailing businesses.

With an uncertain economic climate and continued challenging conditions even with recent GDP growth figures, there has never been a more business critical time to put in place effective credit control policies to reduce debtors days, review regular business reports on customers with outstanding payments and implement a robust debt recovery plan for when debtor days become months.

CCDR – Corporate Credit Debt Recovery Ltd is a leading UK Debt Recovery specialst. Our services include:

UK Debt Recovery – European Debt Recovery – Mediation & Dispute Resolution – Business Reports – Debtor Tracing – Outsourced Credit Control – Corporate Legal Services -