Oldham expert insists insolvency figures do not reflect impact of pandemic
Date published: 16 May 2020
Allan Cadman, the North West chair of the insolvency and restructuring trade body R3
Government figures which show a fall in the number of businesses going bust in April do not reflect the true impact of the pandemic, according to an Oldham expert.
The Insolvency Service figures show that business insolvencies in England and Wales last month were down by 17% on April last year.
However, Allan Cadman, North West chair of the insolvency and restructuring trade body R3, said the figures did not yet provide a clear picture.
He explained: “Some corporate insolvency procedures take time to get underway, while the changes to the normal operating of the courts have meant many civil proceedings have been halted.
"The Government’s support measures for businesses and individuals have undoubtedly helped many stay afloat.
"Additionally, companies which planned for disruption in the case of a no-deal Brexit may find their preparations coming in handy to tackle disruption from a different source.”
Mr Cadman, who is also a partner at insolvency firm Poppleton & Appleby, said that businesses which had gone bust since the pandemic hit were mostly those which were already in financial distress and for whom the lockdown delivered a final blow.
He said insolvency professionals in the region were mainly dealing with requests for advice at present but urged businesses and individuals with debt problems to seek help early.
He added: “Our members are telling us the enquiries they are receiving are mainly for advice and support, rather than for COVID-induced insolvency processes.
"Directors want to understand how to manage their cashflow and what options are open to them operationally, consumers want advice, and both groups want to understand the finer points of the Government’s support measures and what they mean for their circumstances.
“Now more than ever, anyone worried about their own or their company’s financial situation should seek advice urgently, from a professional and reputable source.
"With ‘business as usual’ an unknowable way off, making plans to navigate the disruption the pandemic has caused will be vital.”
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