Despite talk of 'green shoots' of economic recovery and an improving market, the Insolvency team at Sydney Mitchell are expecting a rise in Insolvency cases heading their way.
Already insolvency statistics show that there is a 39.1% increase from last year in company insolvency's. This includes administrations, compulsory liquidations and creditors voluntary liquidations. Individual insolvency's are also on the increase with a rise of 27.4% from last year. This figure includes bankruptcies, IVAs (Individual Voluntary Arrangements) and DROs (Debt Relief Orders).
"Despite the tentative confidence we appear to be hearing from commentators, we are still seeing a continued lack of demand and confidence in the market place" says Kam Majevadia, Partner and head of the insolvency team at Sydney Mitchell.
"Companies have had support from lenders and HMRC through the troubled times but this support is not indefinite. As the economy improves it is not surprising that lenders and HMRC are starting to impose tighter deadlines for increased regular payments. Because of this, companies face even greater pressure on their cash flow and this will result, ultimately, in more companies being faced with insolvency. They will need the expertise of an insolvency lawyer to guide them through the complex insolvency legislation and to help them to avoid the inevitable pitfalls."
In order to meet the increasing demand from their clients Sydney Mitchell have appointed Grace Strawford to join the insolvency team. Grace, a qualified solicitor, has been with Sydney Mitchell since 2005 and has been taken into the department on a permanent basis after being seconded to assist with the high levels of work currently coming in and discovering a real interest in the work. Grace has a broad range of experience which makes her an ideal candidate for dealing with insolvency work.
"For companies facing insolvency it can seem that they are losing everything" says Kam. "Although Insolvency has serious implications, in some cases it can be used to provide debt relief for insolvent companies and individuals, helping them to make a fresh start and review their financial position."
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