As can be seen, corporate insolvencies continue to increase in respect of both the previous quarter and the same quarter last year. The graph below in respect of company liquidation shows very graphically how the numbers of liquidations are growing, although are still below the peak of 2002.

I write elsewhere in this newsletter that the time is upon us to seriously consider Company Voluntary Arrangements as a solution to corporate financial difficulties and this quarter's figures shows that the popularity of CVAs is increasing.

I do not think we have seen the end of the increases but I do not believe that we will see the level of insolvency numbers we saw in the 1990's recession and the final quarter's figures for 2008 will have to be in excess of 5,000 if we are to pass the 2002 annual total of 16,306 liquidations in the year.

Personal insolvencies show a mixed bag. Whilst bankruptcies continue to increase, Individual Voluntary Arrangements are down of the same quarter last year, perhaps reflecting the fact that in the current climate bankruptcy is the best option available to many individuals with financial problems.

Personally, I see more individuals where bankruptcy is the correct course of action rather than an IVA or a debt management plan and I have no reason to believe that this position will change in the foreseeable future.

I believe that the total number of bankruptcy orders made during 2008 will exceed 70,000, which compares to 19,647 a decade ago.

The speed with which the down turn has arrived is having a dramatic effect on the turnover of many companies in the U.K. Unfortunately for many companies, the speed of change in turnover cannot always be matched with similar speeds in cut backs in costs. Also, it is a fact of business life that in cash flow terms, last month's bills are paid for with this month's sales and if the sales are not there, neither is the cash to pay creditors.

The net effect of this dilemma is the failure of perfectly good businesses with good potential but a severe cash flow problem. Until they demonstrate differently, the banks are not prepared to cover this funding deficit and therefore business owners are left with the problem of funding the shortfall.

One possible solution is an insolvency procedure that has been with us since 1986 in the form of the CVA. I believe that this procedure, much discredited in the past and rightly so, is now a very good solution for a company with an inherently good business but in need of a breathing space to restructure. Yes creditors may have to take a write off in respect of part of their debt but surely this is better than losing the whole debt if the company were to cease trading.

The CVA has to be carefully thought through and there are a number of problems that need to be overcome. However, I think that in these unique times, the CVA is a real tool in our armoury to help companies fund their cash flow deficits.

Due for implementation on 1 January 2009 is a new Code of Conduct for Insolvency Practitioners which will standardise the approach that Insolvency Practitioners apply to Pre Pack Administrations.

I have discussed in the past the topic of Pre-Packs. A Pre-Pack is the practice of setting up and agreeing a deal to sell the assets of a failing company prior to insolvency, usually be way of Administration, which is then immediately completed after the appointment of the Administrator. Pre-packs are disliked by some creditors because the buyer is lined up before the struggling business enters Administration, raising fears that directors can simply drop debts and repurchase their own companies.

The Regulators have recognised the concerns of creditors which was borne out by research commissioned by the Association of Business Recovery Professionals (R3).The code has been issued so that Insolvency Practitioners follow a new set of best practice guidelines and principles to ensure that his overriding duty of maximising the return to creditors is upheld.

In addition to the new Pre Pack guide, Insolvency Practitioners are also adopting a new Code of Ethics on 1 January 2009 which has been expanded to include matters of confidentiality, transparency, safeguards and ongoing review. It also gives additional guidance about significant professional and personal relationships.

My concern is whether in our enthusiasm to create transparency, we are in danger of breaching a fundamental principle of business life to maintain confidentiality. I support the fact that with Pre-Packaged Administrations, there is a duty to ensure that the creditors have as much information as possible and to see that best practice has been followed but there will surely be situations where commercially sensitive information must be withheld and time will tell how all interested parties deal with this point.

September saw the final of the Cranfield Carting Challenge and after an exciting season of racing, the final at Daytona Milton Keynes proved no different.So, after months of competition, anticipation and exhilaration the results are in and congratulations go to Brindley Twist Tafft & James who, after finishing third in last year's event, beat off the competition to finish in first place this year.Close Invoice Finance secured second place and coming in joint third were last year's winners Royal Bank of Scotland on equal points with Cranfield Business Recovery. If you are interested in more information on next year's challenge please contact Natalie for details.

We also held the second in our series of our TechBite LIVE seminars at the Herbert Art Gallery in Coventry which looked at the real life issues faced by business owners with accrued historic debt, wanting to start again.To coincide with the seminar, our latest TechBite Bulletin is now available which discusses some of the issues faced by charities who may be suffering in the current economic climate. You can download the latest TechBite Bulletin here.

The annual Cranfield Cheese and Wine party, held at our offices this week was a great success and it was excellent to see so many of you here. The variety of cheese and wines seemed to be a talking point again — in particular the return of the English wine produced by my neighbour from vines in the village was particularly enjoyed. For those of you who couldn't make it, we do hope to see you soon.

If you have reached this far down the Newsletter you have qualified to enter our Christmas Caption Competition.

A number of you have commented on the photograph of the three of us showing off our musical prowess — all you need to do to win a bottle of bubbly for Christmas is to submit the funniest caption by email to Natalie. The closing date is 30 November 2008.

P.S. don't forget to check our fortnightly blog for all our latest news and events at www.cranfieldbusinessrecovery.co.uk/blog/.