Two thirds of business rescues through Administration fail
October 31, 2016
Using the analytics function at financial evaluation experts Company Watch, Opus Restructuring has examined the outcomes of all Administration cases in England and Wales, which commenced in the past five years and confirmed that 70% of the attempted rescues failed to save the business on a long term basis.
Nick Hood, Business Risk Adviser at Opus Restructuring, said:
“Our research shows that, at best, around only 30% of business rescue attempts through the Administration process are successful. It’s a disappointing result, which reflects the endemic ostrich-like behaviour of struggling entrepreneurs who wait far too long before admitting they have problems.
However, we believe a lot more troubled businesses could be rescued if they sought much earlier help from specialist advisers while a broader range of more constructive options can be deployed. By not soldiering on as troubles accumulate, companies that get help stand a far better chance of refinancing or restructuring, saving more jobs and achieving higher and quicker recoveries for unsecured creditors.”