Business Irish

Wednesday 7 December 2016

'Bust' firms leave over €1.1bn debts

Published 26/10/2010 | 05:00

IRISH companies that have gone bust this year have left unpaid debts of well over €1.1bn in their wake, according to new data released yesterday.

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The figures, from business information specialist Vision-Net, show that 1,461 companies have been liquidated since the beginning of the year.

Another 33 insolvent companies have secured protection from their creditors by getting an examiner appointed, while 302 companies have been taken over by their banks.

The €1.1bn figure relates only to the insolvent liquidations, which make up the vast majority of the 1,461 companies that have been liquidated in the year to date.

The debt pile was calculated based on the last available accounts for those liquidated companies. Many of these filings were more than a year out of date.

Vision-Net managing director Christine Cullen yesterday said that companies' debts typically rise in the period immediately leading up to liquidation.

"The €1.1bn is a very conservative figure," she said.

"The fallout from this will be played out at creditor meetings with suppliers and businesses fighting it out for fractions of what they are owed."

In many liquidations, unsecured creditors walk away with nothing at all after assets are split between preferential creditors like Revenue and employees, and secured creditors like banks.

The running tally of this year's liquidations is about 12pc behind that of 2009, but Ms Cullen said she was expecting a "surge" in collapses before the end of the year.

Receiverships are already running at almost twice their 2009 levels, as banks grow impatient and demand payment, while this year's examinership tally is down 62pc, reflecting the volume of unsuccessful examinership attempts in 2009.

Vision-Net's figures also show that 10,900 corporate entities have ceased to exist since the start of the year, but Ms Cullen admitted that that figure did not imply all 10,900 companies had closed.

Financial companies can set up scores of corporate entities to run different funds, which are then wound down and classified as "dissolved".

Corporate entities can also be set up and then dissolved without ever actually trading, while companies can close one corporate entity and open another without their business being impacted.

Ms Cullen pointed out, however, that many of the 10,900 companies that had been classified as dissolved so far this year were effectively closures.

Vision-Net's overall figures show that of the 182,000 registered entities, about 130,000 to 140,000 are trading,

Irish Independent

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