Major rise in corporate insolvencies in early 2012

New statistics released last week by InsolvencyJournal.ie show that over five companies went out of business per day in the second month of 2012. The total figure of 166 is up by 23% on the totals when compared to January 2012. The figures show a 20% increase for the first two months when compared with January and February of last year. Nationally, 301 companies collapsed in first two months of 2012 compared to 249 for the same period last year with Leinster the worst hit, accounting for 61% of the overall total Construction industry was most affected accounting for 25% of the overall total. Commenting on the figures Ken Fennell, Partner with Kavanaghfennell the firm who compile the data said: "The first two months of 2012 have seen a significant increase when compared with the same period for the last three years. Not surprising the construction sector and associated services continue to bear the brunt of corporate failures". The continuing large number of receiverships demonstrates both banks and NAMA's intention to take enforcement action where deemed necessary and where they believe it will result in a greater recovery of the outstanding debt. In conclusion Ken Fennell commented, "The large number of companies opting to voluntarily liquidate themselves is an indication of how difficult some SME's are finding the current trading environment. There is a continuing slow but steady increase in the number of companies seeking court protection by utilising the Examinership process. We would expect the number of Examinerships to rise during the year."