There’s welcome news for the farmers and food producers of East Anglia, as the latest research from insolvency trade body R3 shows insolvency levels are down amongst agricultural businesses in the region and across the UK.
Despite continuing pressures on the sector, the figures for April reveal a UK-wide drop of 2% in the number of companies at risk of insolvency when compared to last month. Perhaps more surprising still is the fact that of the ten sectors surveyed by R3, the agricultural industry had the fewest number of businesses at higher than normal risk of insolvency. The sectors with the greatest number of at-risk businesses included restaurants (40%), I.T. (36%); and pubs (35%).
It’s thought the increasing number of shoppers looking to buy local produce, and growing pressure from lobbying groups seeking fairer prices for farmers, have successfully strengthened the sector.
The BHS Effect
With stores in Norwich, Ipswich and Cambridge, and several in Portsmouth and surrounding areas, our office locations are definitely feeling the effect of the nationwide failure of BHS. BHS collapsed with a £571m sized black hole in its pension fund, and it’s being left to the taxpayer to make up the shortfall.
Thankfully for those on the BHS final salary pension scheme, the Pension Protection Fund is stepping in to foot the bill for the retailer’s thousands of pensioners. However, those who aren’t yet retired could still end up with less income than they had expected in old age. While the pension was not the main reason for the high street giant’s failure, it’s now one of the biggest issues in its administration.
All may not be lost, however, as multiple offers to buy all or part of the BHS chain have been put forward.
Struggling Firms Could Be Given More Breathing Space
The chairman of R3 Eastern believes the East of England’s struggling firms should be given more breathing space to help them come up with a recovery plan. These comments come in response to the suggestion that a business rescue moratorium should be introduced to save more companies that are experiencing severe financial strain.
The proposed change to the current corporate insolvency regime would give failing companies a period of up to six weeks free from creditor pressure. Creditors would not be able to pursue the debts they are owed for an initial 21 days. This period could then be extended by an additional 21 days with approval from the court.
During the moratorium, firms would be overseen by a moratorium supervisor to ensure directors are using the time as intended, namely, to put a rescue or recovery in place. Under the current rules, insolvency experts argue it is too easy for anxious creditors to undermine potential rescues by issuing a winding-up petition. The moratorium would give companies the time they need to fully consider their rescue and recovery options, potentially safeguarding more jobs and improving creditor returns.
If you’re experiencing personal or corporate financial difficulties, please get in touch with our expert insolvency practitioners today for a free, no-obligation discussion.