Creditors feel €102m pain of firms' collapse
THE 253 companies that collapsed in the first quarter of thee year left average debts of €245,000 in their wake, as trading partners, solicitors and even the Dublin Fire Brigade lost out in the latest wave of insolvencies.
The figures are revealed in pioneering research from debt monitor Stubbs Gazette, which attended well over 100 of the 253 creditors' meetings held so far this year.
The six-figure average cost excludes massive cases like Jim Mansfield's Citywest group, which revealed debts of more than €40m at its creditors' meeting in early January.
The figures also exclude the debts collapsed companies owe to their own directors, since those could distort the data.
"We started collating liquidators' statement of affairs in 2010 and we've been staggered by the cost to creditors of each liquidation," says James Treacy, managing director of Stubbs Gazette's owner BusinssPro.
Overall debts left behind by collapsed companies amounted to €102m in the first three months of the year, Stubbs Gazette says, up from €51.1m in 2010.
The rise is largely accounted for by the Citywest case, but the number of creditors' meetings held also increased slightly from 225 in 2010 to 253 in the first quarter of 2011.
A snapshot of data collated by Stubbs Gazette shows a wide range of creditors have been caught in the crossfire in the latest round of collapses.
Trading partners feature heavily, as do professional services like solicitors, as well as newspapers and radio stations that haven't been paid for ads and utilities.
Some also feature more colourful creditors. The Dublin Fire Brigade was listed as being owed just over €5,500 at the March creditors' meeting of Kamp Easi Ltd, while 'Pat the Baker' was owed more than €6,000 in the Citywest liquidation.
Creditors' meetings accounted for the majority of the 396 insolvencies, with the remainder split between the court-led examinership process which gives companies the chance to restructure their debt and resume trading, and 'receivership' which allows banks and other secured creditors to take control of specific assets.