Businesses That Survived the Recession are Now at Risk of Liquidation

POSTED ON Monday, July 20th, 2015

An alarming warning has been issued by one of Scotland’s leading experts in corporate financial distress, stirring unease and angst amongst directors of companies around the world. Matt Henderson, restructuring partner for accountants Johnston Carmichael, has claimed that the improving economy of 2015 actually encompasses a counter-intuitive risk of liquidation for many businesses.

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DID YOU KNOW?

Voluntary Administration has increased by 13.4% from 2013 to 2014

Henderson’s analysis of official UK statistics reveals that despite reports of falling company insolvency numbers, the number of Scottish companies facing the prospect of liquidation and voluntary administration has in fact increased by 13.4% from September 2013 to September 2014.

He states that contrary to common assumption, companies are the most financially vulnerable when the economy is doing well and directors relax, believing that the worst is over. Henderson lists some of the perils of economy recovery as the need to carry additional stock; the need to invest in new plant and equipment; the need to finance and hire new employees or contractors and to finance an expanded sales ledger.

If companies do not have adequate access to growth capital and don’t restructure their company to enable growth, they may face the undesirable prospect of liquidation. Henderson states that additionally, with a possible forecasted interest-rate rise later in 2015, more companies than ever are likely to face insolvency down the track.

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If your company is facing liquidation, or you suspect the prospect of liquidation is not too far down the road, Australian Company Liquidations (ACL) can help. Our team of professional liquidation specialists can provide you with expert advice on your individual case. Our fully licensed and experienced team can also assist you with the actual process of liquidation.

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