R3, the Association of Business Recovery Professionals, has recently announced that they have seen an increase in corporate insolvencies and liquidations of 0.2% on the previous quarter and 4.3% on the same period last year. Lee Manning, the president of R3, commented “this may seem like bad news but the fact is, if economic recovery is going to happen, then some unviable businesses must be allowed to fail to allow others to thrive’.
It is disappointing that the economy has dipped back into recession but for those of us involved at the sharp end it doesn’t come as much of a surprise. That being said, it is hoped that this “dip’ will not last as long as the previous one and I agree with Lee Manning that recession has a way of seeing off businesses which were badly run or were unviable from day one. When the recovery starts, those business that are still left will find that the competition will have reduced; giving them a much better opportunity to grow their businesses and thus contribute to the overall growth of our economy.
By Ian Liddle, Corporate Insolvency Solicitor in Manchester