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Company insolvencies continue to rise

The number of company insolvencies in February 2024 increased to 2,102 - 17% higher than a year ago and nearly double pre-pandemic figures.



In February 2023, the figure was 1,801 while in February 2019 there were only 1,213 company insolvencies.


The latest figures released by the Insolvency Service are higher than when government support measures were in place in response to the Covid-19 pandemic and significantly higher than pre-pandemic numbers.


There were 217 compulsory liquidations, which was 35% higher than February 2023 and 166 administrations, up 54% on the same time last year.

The worst affected sectors were construction (295 insolvencies), hospitality including accommodation and food/beverage (262), and retail (248).


Commenting on the figures, Mark Goodwin, Managing Director at Optimise, said: “Businesses are continuing to struggle following cost increases last year and ongoing high interest rates.


“We believe insolvencies will continue to rise for a number of months yet.”


Continued Mark: “Against this economic backdrop, Optimise is being utilised for a wide range of insolvency litigation related claims including overdrawn directors’ loan accounts, breach of contract, breach of duty, transactions at undervalue, preferences, unlawful dividends, wrongful trading and claims against third parties.

“Our established arrangement with a leading litigation funder avoids the lengthy delays often associated with seeking approval from third party funders and the fees of introducing brokers, which allows us to return greater recoveries to the insolvent estate and a much shorter take on procedure.”

Added Paul Flint, Client Services Director at Optimise: “Since launching the business earlier this year, we have received multiple enquiries from IPs and lawyers interested in our flexible approach and how we can help. These enquiries include claims against former directors of between £100,000 and £1m and transactions at an undervalue of up to £13m. This has confirmed our belief that there are a wide range of claims to be brought on behalf of officeholders and our first 2 months of trading have been at a much higher level than we projected.”

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