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Acting early can help companies get through financial distress

Publication of A Practical Guide to Insolvency by Deloitte

Financial distress and insolvency reached record levels in recent years, but companies can survive if they take action early, according to Deloitte who are authors of ‘A Practical Guide to Insolvency’ which was published by Chartered Accountants Ireland.

The total insolvency figures almost quadrupled as a result of the downturn.  From just 379 in 2007, the average since 2010 has been above 1,500 each year.  The number reported in the six months to June 2014 was 650.

Year CVLs Court Liquidations Receiverships Examinerships Overall total
2009 1,137 108 123 34 1,402
2010 1,191 93 225 16 1,525
2011 1,252 86 284 16 1,638
2012 1,187 71 399 27 1,684
2013 918 63 363 21 1,365
2014* 426 44 167 13 650

*Numbers to June 2014 courtesy of www.insolvencyjournal.ie.

“We have insolvency procedures in place to preserve businesses that are entangled with debt problems; however we fail to make enough use of those rescue procedures as we typically choose to fight our own battles rather than seeking outside assistance in a timely fashion. This means that many businesses that could survive are failing because they do not seek support in time. This delay in seeking assistance will actually make things dramatically worse, as the rescue options available diminish as the debts pile up and creditor support is ultimately eroded to zero,” author of the book David van Dessel, Partner, Corporate Finance, Deloitte said.

“Managing a company in financial distress can be a real challenge.  But those who approach it in an upfront and hardnosed manner often have the best chance of surviving the crises and moving onto prosperity,” he concluded.

There are some practical tips to help SMEs to overcome corporate insolvency, according to Van Dessel, including:

Top tips for SMEs:

  1. Act early
  2. Quantify the problem
  3. Make an honest assessment of your ability to repay all creditors
  4. Seek professional advice/assistance
  5. Chart the right journey for the recovery of your business


A Practical Guide to Insolvency, 2nd Edition, by Deloitte and published by Chartered Accountants Ireland, is now available to purchase on the Chartered Accountants Ireland website at https://www.charteredaccountants.ie/en/General/Shop/Books/A-Practical-Guide-to-Insolvency-2nd-Edition/.

For further information please contact

Claire Quinn
PR Manager
Deloitte
01 417 2356
cquinn@deloitte.ie

Aoibheann O’Sullivan
Murray Consultants
01 498 0346
aoibheann.osullivan@murrayconsult.ie

About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/ie/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

The information contained in this press release is correct at the time of going to press.

Deloitte has nearly 2,000 people in Dublin, Cork and Limerick providing audit, tax, consulting, and corporate finance services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges.

Deloitte has in the region of 200,000 professionals, all committed to becoming the standard of excellence.

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