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50% of firms in difficulties 'will not be rescued'

Published on 22 Jun 2009 under category: legal

A new survey has revealed that failing companies only have a 50 per cent chance of being rescued, highlighting the importance of insolvency solicitors.

Research by PricewaterhouseCooper (PwC) and the Daily Telegraph has found a number of factors such as poor management and scarce funding are contributing to this finding.

Those businesses operating in the automotive, construction, leisure and property sectors are among the businesses most at risk, it claims.

Richard Boys-Stone, the partner at PwC who heads the turnaround panel, claims that more than half of businesses are reluctant to admit they are in difficulty, preventing these organisations to ask for help.

He states: "Management teams can be a very hard nut to crack. Many of them are in denial. Often they are inexperienced in recession and they just don't know what to do and the time pressures involved."

Last week, the government announced that it would be launching a consultancy into the insolvency process, which could interest those looking at insolvency solicitors.