Insolvency News – 3rd Quarter 10


COMPANY INSOLVENCIES

There were 3,974 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the third quarter of 2010 (on a seasonally adjusted basis).  This was a decrease of 2.2% on the previous quarter and a decrease of 13.9% on the same period a year ago.

This was made up of 1,126 compulsory liquidations (which are down 3.2% on the previous quarter and down 12.6% on the corresponding quarter of the previous year), and 2,847 creditors voluntary liquidations (which are down 1.8% on the previous quarter and down 14.4% on the corresponding quarter of the previous year).

Table I. Company Liquidations in England and Wales (seasonally adjusted) 1
   

% change – Q3 2010 on

   

2009 Q3

2009 Q4

2010 Q1

2010 Q2 r

2010 Q3 p

Q3 2009

Q2 2010

Company Liquidations

4,615

4,457

4,060

4,063

3,974

-13.9

-2.2

of which: Compulsory

1,289

1,331

1,298

1,164

1,126

-12.6

-3.2

Creditors’ Voluntary2

3,326

3,126

2,762

2,899

2,847

-14.4

-1.8

Source: Insolvency Service and Companies House
p = provisional, r = revised
1 Longer series back to 2000 are presented in the accompanying detailed tables.
2 Where the creditors’ voluntary liquidation is the first insolvency procedure entered into (see Notes to Editors).

Additionally, there were 1,141 other corporate insolvencies in the third quarter of 2010 (not seasonally adjusted) comprising 349 receiverships, 633 administrations and 159 company voluntary arrangements. In total these represented a decrease of 27.7% on the same period a year ago.  Within this, administrations were down 35.0%.

Table II. Other Corporate Insolvencies in England and Wales (not seasonally adjusted) 1
   

% change – Q3 2010 on

   

2009 Q3

2009 Q4

2010 Q1

2010 Q2

2010 Q3 p

Q3 2009

Receiverships2

410

397

356

302

349

-14.9

Administrations3

974

849

783

777

633

-35.0

Company voluntary arrangements

194

219

204

232

159

-18.0

Source: Companies House
p = provisional,
1 Longer series back to 2000 are presented in the accompanying detailed tables.
2 Includes Law of Property Act receivers (see “Notes to Editors” paragraph 9).
3
Includes Administrator Appointments.

Note: The figures in Table II are not seasonally adjusted and are not, therefore, on the same basis as the headline figures in Table I.  The accompanying detailed tables also include the non-seasonally adjusted series for corporate liquidations.

INDIVIDUAL INSOLVENCIES

There were 33,935 individual insolvencies in England and Wales in the third quarter of 2010. This was a decrease of 3.7% on the same period a year ago.

This was made up of 13,907 bankruptcies (which were down 24.2% on the corresponding quarter of the previous year), 12,960 Individual Voluntary Arrangements (IVAs), (which were up 4.6% on the corresponding quarter of the previous year) and 7,068 Debt Relief Orders (DROs), which have increased each quarter since their introduction in April 2009.

In the third quarter of 2010, 84.4% of bankruptcies were made on the petition of the debtor, broadly comparable to the levels for recent quarters.  The percentage of bankruptcy orders involving trading debts (self-employed bankruptcies) was 12.8% in the second quarter of 2010 (third quarter 2010 figures for trading-related bankruptcies are not yet available), similar to the level for 2009 as a whole.

Table III. Individual Insolvencies in England and Wales (not seasonally adjusted) 1
   

% change – Q3 2010 on

   

2009 Q3

2009 Q4

2010 Q1

2010 Q2

2010 Q3 p

Q3 2009

Total Individuals

35,242

35,574

35,682

34,743

33,935

-3.7

Bankruptcy Orders

18,347

17,007

18,256

14,982

13,907

-24.2

Debt Relief Orders

4,505

5,348

5,644

6,295

7,068

56.9

Individual Voluntary Arrangements

12,390

13,219

11,782

13,466

12,960

4.6

Source: Insolvency Service
p = provisional
1 Longer series back to 2000 are presented in the accompanying detailed tables, as are seasonally adjusted figures for individual voluntary arrangements (and for bankruptcy orders up to Q1 2009 only)

 

COMPANY LIQUIDATION AND INDIVIDUAL INSOLVENCY RATES: LONGER-TERM PERSPECTIVE

In the twelve months ending Q3 2010, approximately 1 in 133 active companies (or 0.8% of all active registered companies) went into liquidation, which is a slight decrease from the previous quarter, when this figure stood at 1 in 127.  As Figure 3 shows, the liquidation rate remains low compared to a peak of 2.6% in 1993, and the average of 1.3% seen over the last 25 years.  It should be noted that the number of active companies has changed considerably over this period; there were over 2.2 million active registered companies in Q3 2010; this compares with only about 900,000 in the early 1990s and less than 800,000 in 1986.

In the twelve months ending Q3 2010, approximately 1 in 311 people became insolvent.  This is down from 1 in 307 in the previous quarter.  As Figure 3 shows, the individual insolvency rate has displayed a steeply upward path (with some fluctuations) since 2004 and is currently elevated compared to the annual average of 1 in 575 (0.1%) people seen over the last 25 years.

 

INSOLVENCIES IN SCOTLAND AND NORTHERN IRELAND

The following tables present recent trends in insolvencies in Scotland and Northern Ireland, complementing those for England and Wales above (longer series back to 2000 are presented in the accompanying detailed tables).

Table IV. Insolvencies in Scotland (not seasonally adjusted)  

% change – Q3 2010 on

 

2009 Q3

2009 Q4

2010 Q1

2010 Q2

2010 Q3 p

Q3 2009

Company Liquidations1

123

154

275

297

224

82.1

 

of which:

Compulsory

95

106

202

215

154

62.1

 

Creditors’ Voluntary2

28

48

73

82

70

150.0

 
Individuals3, 4

5,777 r

5,693 r

5,200 r

5,378 p

5,168

-10.5

 

of which:

Sequestrations4

3,514 r

3,365 r

3,167 r

3,139 p

3,092

-12.0

 

(of which: LILA)

(2,107)

(1,990)

(1,905)

(1,897) p

(1,631)

(-22.6)

Protected Trust Deeds

2,263

2,328

2,033

2,239 p

2,076

-8.3

 
p = provisional, r = revised
1
Source: Companies House
2
Including those companies which had previously been in administration or other insolvency procedure
3
Source: Accountant in Bankruptcy (AiB). Latest Release: AiB Quarterly Statistics – Q2 2010/11
4
The sequestration figures include LILA (Low Income, Low Assets) cases.  These were introduced as a new route into bankruptcy under the Bankruptcy and Diligence etc (Scotland) Act 2007, wef 1 April 2008.
 

 

Table V. Insolvencies in Northern Ireland (not seasonally adjusted)

% change – Q3 2010 on

2009 Q3

2009 Q4

2010 Q1

2010 Q2

2010 Q3 p

Q3 2009

Company Liquidations

51

74

102

116

79

54.9

of which:

Compulsory1

27

57

49

92

55

103.7

Creditors’ Voluntary2

24

17

53

24

24

0.0

Individuals1

379

573

554

636

551

45.4

of which:

Bankruptcies

198

381

316

363

290

46.5

IVAs

181

192

238

273

261

44.2

p = provisional, r = revised
1
Source: Department for Enterprise, Trade and Investment, Northern Ireland (DETINI)
2
Source: Companies House