The number of UK companies going into administration has surged, with more than 850 businesses finding themselves insolvent in the first three months of 2008.
The number of companies in administration rose 54%, from 557 in the last quarter of 2007 to 858 at the end of the first quarter of 2008, according to research by magic circle law firm Freshfields Bruckhaus Deringer. In the same period, liquidations in the UK have risen by 2% to 3,210 based on Insolvency Service statistics.
Freshfields restructuring and insolvency chief Ken Baird said: “The credit crunch has caused a sharp reduction in credit availability and higher loan costs, draining much of the available liquidity. This has triggered a downturn in fortunes across sectors, with companies that were already under financial pressure among the first to throw in the towel.
“The longer the crunch goes on, the harder it will be for many businesses. For some this may mean long-term survival cannot be guaranteed.”
