Bishop & Sewell

It’s rarely cheery reading, writes David Little, Partner in our Commercial and Corporate team, absorbing the monthly updates of R3, the Association of Business Recovery Professionals, but there are some telling statistics in their latest monthly update on insolvencies.

Surprisingly corporate insolvencies were 34% lower in July compared with July 2020, although compared with the previous month the trend is upwards.

Logic would suggest that as the government’s furlough scheme has less than ten weeks to run, we can expect more businesses will struggle.

Colin Haig, President of R3, comments on the latest insolvency statistics: “All the signs point to a tough road ahead. The UK has entered a recession, consumer confidence is low, and a number of big-name brands have recently announced they are exploring or have entered insolvency or restructuring procedures.

“This suggests the business climate will be challenging in the foreseeable future – and will not be made any easier as the Government support packages begin to wind down.

“Our members are telling us that it may not be long before companies which would be viable under normal circumstances begin to seek support from an insolvency and restructuring professional, as a result of the impact of the pandemic.

“This may lead to an increase in requests for personal insolvency support if people lose their jobs or agree to take on liability for a business’s debts as part of an unsuccessful attempt to turn it around.”

Seek help early

My Bishop & Sewell colleague Rhian Radia, Head of our Employment team, wrote this article last week, with some steps to take if you have been made redundant or fear your role is at risk of redundancy.

Our advice to business owners, worried about their personal or their business’s financial health is to seek help as soon as you start to see signs that you might be in trouble.

Doing so gives you time, and a better chance of turning your situation around – as more options take decisions on how to best to make some progress.

It’s no disgrace recognising you may need help. Big as well as small brands have found they need to take immediate action.

Marks & Spencer announced last month that it was slimming its workforce by at least 10 per cent.

Travel giant Tui has revealed the pandemic pushed it to a £995 million loss in its third quarter after it halted holidays, but insists demand is now helping to grow again.

Neither is a long history a guarantee of future stability; Debenhams, the 242 year old department store, has been widely reported to be considering winding up the business putting some 14,000 jobs at risk.

The scale of the insolvencies can really only be guessed at. This press release from Altradius, a credit insurer based in the Netherlands, estimates that across Europe there will be a 26 per cent spike in insolvencies.

Who really knows?

We’ll be monitoring the situation very carefully and stand ready to have a confidential conversation with anyone who may need to discuss their business’s future.

Please contact me via email or call me, on 44 (0)20 7079 4143.


About David Little

David is a Partner in the Corporate & Commercial team, a business lawyer, focusing on transactional work, especially acquisitions and disposals of businesses. He also has a corporate finance practice, focusing on smaller cap listings and fundraisings on the Standard List, AIM and NEX.

As a passionate sportsman and spectator, David has built up a credible sports practice, focusing particularly on governance matters and on marketing, merchandise and sports finance generally. He has also built up a large client following in the media, marketing and PR sectors, as well as restaurants, bars and contract catering.

He is well able to understand matters from the client perspective, having spent time working in industry as group legal counsel and company secretary for an AIM-listed financial services business and having also served on the Board as a non-executive director for an AIM-listed financial training company.

His clients value his commercial experience and his common-sense approach to transactions and company law matters, and he is viewed as pragmatic, focused and always accessible.

Specialist areas

  • Mergers & Acquisitions
  • Corporate Finance
  • Equity Capital Markets
  • Natural Resources
  • Sports Marketing and Governance
  • Retail & Leisure
  • Restaurants, Bars & Catering


The above is accurate as at 02 September 2020. The information above may be subject to change during these ever-changing times.

The content of this note should not be considered legal advice and each matter should be considered on a case by case basis.

Category: News | Date: 2nd Sep 2020

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