Irish corporate insolvencies reaching record levels

Irish economists are predicting a record number of corporate insolvencies in 2010, after the half-yearly figures showed an increase of 27 per cent on the same period in 2009.

792 Irish companies went bust between January and June this year, compared with 622 in 2009. The figure for the year so far has already exceeded the total number – 773 – for the whole of 2008. Leading economist, Tom Kavanaugh, founding partner in Kavanagh Fennell, predicted that the total number would edge close to 2,000.

"It is probable that there will be close to 1,800 insolvencies this year and if the figure for personal asset receiverships is included, insolvencies are likely to be over 2,000 for the year," he warned.

Receivers were appointed to 118 companies in the same period this year, rising 174 per cent increase from the 43 registered in the same period in 2009's and nearly as many as the yearly total of 124.

Kavanaugh attributed the figures to chain effects. He explained: "Banks are moving into recovery mode to recover distressed loans. We're seeing a similar increase in personal asset receiverships, if not a bit more, so there were probably twice as many receiverships in the first half of the year if personal asset receiverships are included."



Particularly hard hit were companies operating in the domestic market, with construction services, hospitality and retail accounting for three quarters of all insolvencies. Export-led sectors such as manufacturing, wholesale and transport, however, represented just 13 per cent of failures.

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