Tony Mitchell
Managing Director
02476 553700
Business Rescue & Insolvency Newsletter
Welcome to our first quarterly Newsletter of 2008 and a special welcome to all our accountancy friends and contacts, well done, you have made it through another 31 January. Our aim in the Newsletter is to bring you the latest facts, news and comments on insolvency and business related issues and about us. We would love to hear from you with any comments on the newsletter and any topics you would like us to cover.
Insolvency Latest - Quarter 4 2007, Published 1 February 2008
| No. In Quarter | Change On Previous Quarter | Change On Same Period Last Year |
|
|---|---|---|---|
| Company Liquidations | 3,135 | +0.3% | -2.1% |
| Receiverships | 147 | +63.3% | -9.2% |
| Administrations | 557 | +9.6% | -62.3% |
| Company Voluntary Arrangements | 91 | -16.5% | -13.8% |
| Bankruptcies | 15,659 | -1.1% | -8.3% |
| Individual Voluntary Arrangements | 9,188 | -8.3% | -27.3% |
Source: The Insolvency Service (1 February 2008).
Economic growth though most of 2007 was strong, despite a rise of 1.25% in base rates during the year and was well ahead of original expectations. Unfortunately, a growing swell of opinion by those who profess to know about these things, predict that growth in 2008 will slow quite sharply particularly, as we are already seeing, with the squeeze on public sector spending and consumers drawing in their purse strings.
Over the last few years there have been only modest fluctuations in company liquidations and this trend continues this quarter. Nothing significant can be read into the large fluctuations in receiverships or administrations as the comparative quarters were out of line with the general trend. In respect of both receiverships and administrations, overall, the 2007 appointments were down by 18.9% and 34.6% respectively.
We do not believe that there are any signs of an impact of the "credit crunch" in these figures and we will have to wait for the figures later in the year to assess what impact this may have on corporate insolvencies.
There was a further drop in the number of personal insolvencies this quarter, the forth in a row and means that this quarter's personal insolvency figures are 16.4% less than the same quarter last year and in respect of voluntary arrangements, a dramatic 27.3% less. Is this a reflection on the tougher stance being adopted by the banks and other institutional lenders in respect of Proposals being put forward by the "IVA factories"?
Undervalue Transactions and Matrimonial Proceedings
Earlier this year, the Insolvency profession was amazed when a High Court decision was handed down which held that a transfer of property made pursuant to an Order made in matrimonial proceedings less than five years before the bankruptcy of the transferor, constituted a transfer at an undervalue for the purposes of section 339 of the Insolvency Act 1986.
Unsurprisingly, the decision was appealed and the Court of Appeal in December allowed the appeal and overturned the decision of the High Court Judge. As always each case is decided on its own merits but we are at least back to where we were, being that Insolvency legislation will only in exceptional cases interfere with matrimonial Court decisions.
The "IVA Protocol"
For many months now there have been tensions between the insolvency industry and the banking/credit card sectors and their voting agents which arose as a result of the volume of Consumer Credit based IVA Proposals being presented but which quickly spread to all IVA Proposals.
Both sides have been working within an IVA Forum to try to resolve their fundamental differences which, it was felt, was resulting in some debtors being denied the opportunity to consider the IVA option and were left with either entering a long term Debt Management Plan ("DMP") or bankruptcy.
With effect from 1 February 2008, a new Protocol has been agreed which is expected to provide a basis for the quicker, more streamlined preparation and submission of IVAs to creditors, who in turn, should agree and accept them "as submitted". The Protocol relates to straightforward consumer debtor proposals.
If you would like to know more about the detail of what constitutes a straightforward consumer debtor proposal please contact me.
The Money Laundering Regulations 2007
15 December 2007 saw the introduction of the above Regulations which superseded The Money Laundering Regulations 2003, which are withdrawn and harmonise EU rules in this area. The ACCA have produced a very useful guide to the new Regulations which can be found in its Issue 14 - December 2007 Insolvency Newsletter at www.accaglobal.com/publicinterest/activities/library/insolvency/insolvency_newsletter.
The Cranfield Blog
Those of you who have recently visited our web site will have seen our latest feature, The Cranfield Blog. This is a weekly addition to our web site from the Cranfield management team on matters tenuiously linked to corporate recovery and insolvency matters. I would encourge you to go and have a look and tell us what you think. You can find the Blogs at www.cranfieldbusinessrecovery.co.uk/blog.
The Cranfield Carting Challenge Cup
A new Carting season is fast approaching and with sixteen teams again competing in this year's four race series it is likely to be as exiting and competitive(!) as ever. Last year's winners, RBS will be looking to retain the trophy but with a number of new teams entering this year, they will have to work hard through to the September final which this year will be at the Daytona International Karting Circuit at Milton Keynes.
Good luck to all those competing this year and remember, its just a bit of fun.
The Early Bird Golf Society
This year's Society season starts on Thursday 13 March at Coventry Golf Club, Finham at 7.15 a.m.
This year we have decided to play bi-monthly through to September and if you do not already receive the email from Natalie with all the details, please contact her on 024 7655 3700 or email her at natalie.lagopoulos@cranfieldbusinessrecovery.co.uk.