Our website is set to allow the use of cookies. For more information and to change settings click here. If you are happy with cookies please click "Continue" or simply continue browsing. Continue.

Insolvency Law

Expert guidance on all aspects of corporate and personal insolvency

24 APR 2013

Is suicide more common than murder in corporate insolvency?

In the 2006 edited collection Company Charges: Spectrum and Beyond (Getzler, J & Payne, J (Eds). Company ChargesSpectrum and Beyond. Oxford University Press, Oxford, 2006) UCL's Professor Robert Stevens provides a memorable turn of phrase on the volume of different corporate insolvency procedures in his contribution (Chapter 7 - Robert Stevens:Security After the Enterprise Act). After commenting that the largest number of insolvency proceedings are creditors' voluntary liquidations brought about at the instigation of management through the company, he observed, "In corporate insolvency, suicide is far more common than murder." 



I have included below the statistics on corporate insolvency since the year 2000 (source: Insolvency Service) so that we might mull on this evocative turn of phrase. As the statistics demonstrate Professor Stevens is correct. Company Voluntary Liquidations (CVLs) far out strip the other corporate rescue procedures and in particular the 'murderous' compulsory liquidation. Why? Is it because directors are getting to grips with insolvency issues at an early stage and causing their companies to select this route, or is it simply because the type of companies that go into compulsory liquidation are less. In other words, is there a conscious choice between murder and suicide in this context. Or are there some other issues at play? Despite the so called 'liquidation substitution' wrought by the Enterprise Act 2002 changes we might still want to undertake a thorough examination of the nature and use of CVLs to see how they are used. 




COMPANY LIQUIDATIONS IN ENGLAND AND WALES










 


         
             
Year     Total Compulsory Creditors  
        Liquidations Voluntary  
          Liquidations  
             
2000     14,317 4,925 9,392  
2001     14,972 4,675 10,297  
2002     16,306 6,231 10,075  
2003     14,184 5,234 8,950  
2004     12,192 4,584 7,608  
2005     12,893 5,233 7,660  
2006     13,137 5,418 7,719  
2007     12,507 5,165 7,342  
2008     15,535 5,494 10,041  
2009     19,077 5,643 13,434  






RECEIVERSHIPS, ADMINISTRATIONS AND COMPANY VOLUNTARY ARRANGEMENTS IN ENGLAND AND WALES REGISTERED AT COMPANIES HOUSE   

                   
Year     Receivership Appointments   Administrator Appointments   In Administration (Enterprise Act 2002)   Company Voluntary Arrangements  
                     
                     
2000     1,595   438   :   557  
2001     1,914   698   :   597  
2002     1,541   643   :   651  
2003     1,261   497   247   726  
2004     864   1   1,601   597  
2005     590   4   2,257   604  
2006     588   0   3,560 4 534  
2007     337   3   2,509   418  
2008     867   2   4,820 5 587  
2009     1,468   0   4,161 726  

Picture Credit: http://www.solarnavigator.net/animal_kingdom/animal_images/suicide_by_edouard_manet_1877.jp

Individual Voluntary Arrangements

Individual Voluntary Arrangements

"This is the ultimate statement of where the law on IVAs is to be found in our great common law...

Available in Insolvency Law Online
Bankruptcy and Personal Insolvency Reports

Bankruptcy and Personal Insolvency Reports

"BPIR is an excellent series, of interest to both corporate and personal insolvency lawyers,...

More Info from £166.00
Available in Insolvency Law Online
Subscribe to our newsletters