Across 2023, the rate of corporate insolvencies in England and Wales fluctuated but trended significantly higher than the previous year, peaking in an especially tumultuous November. Turning from statistics to the news headlines, it was striking but perhaps not surprising to see many household name businesses forced into administration.
In the final statistics release of this year, the Insolvency Service confirmed that there were 2,466 registered company insolvencies in November 2023 (the December figures will be released early in 2024). Not only was this 21% higher than in the previous November, but 7% higher than the figures in October 2023.
The company insolvencies in November 2023 included:
As the ‘slow crush’ of persistently high interest rates bites, businesses of all kinds are struggling and many are reaching the point of failure, as indicated by each month’s number of creditors’ voluntary liquidations (CVLs) charting higher than the same period a year prior. The latest statistics from The Insolvency Service reveal that registered company insolvencies in October 2023 were 18% higher than in the same month in 2022.
On 26 September 2023, our Insolvency and Asset Recovery team hosted a seminar explaining the emerging and developing types of disputes focussed on insolvent estate recoveries.
A combination of continued high prices and rising interest rates has heaped pressure on already struggling businesses through the summer of 2023. The challenging circumstances have lead to an overall rise in creditors’ voluntary liquidations (CVLs) compared to both earlier months and the previous year, though the picture borne out by the statistics is more complicated than might be expected.
In this week’s TGIF, we consider the recent case of Vita Group Ltd, in the matter of Vita Group Ltd [2023] FCA 400, in which his Honour Justice Jackman outlined practical changes to the way schemes of arrangement should be implemented through the Federal Court to make them simpler, faster and more cost efficient.
Key takeaways
Recent economic challenges have triggered significant developments for household name companies in 2023.
In this week’s TGIF, we consider the Federal Court’s recent decision inFotios (Bankrupt) v Helios Corporation Pty Ltd (No 3) [2023] FCA 251, and earlier decisions in the same proceedings, clarifying the current Australian position as to priorities between creditors of successive trustees.
Key takeaways
The latest insolvency statistics in the UK make for grim reading. Per the government’s official assessment, 1,964 corporate insolvencies took place in December 2022, 32% higher than in the same month in the previous year and 76% higher than the number registered three years previously pre-pandemic. With inflation and energy costs remaining high and government support rolling back, companies will be taking whatever steps they can to remain in business.
On December 5, 2022, in In re Global Cord Blood Corp., 2022 WL 17478530 (Bankr. S.D.N.Y. Dec. 5, 2022) (“Global Cord”), the U.S. Bankruptcy Court for the Southern District of New York (the “Court”) denied recognition of a proceeding pending in the Grand Court of the Cayman Islands (the “Cayman Proceeding” and the court, the “Cayman Court”) because it was more like a corporate governance and fraud remediation effort than a collective proceeding for the purpose of dealing with reorganization or liquidation, as Chapter 15 of the Bankruptcy Code requires.