The number of bankruptcies has been increasing for sixteen months in a row.
The number of bankruptcies increased again in August. On an annual basis, the number of bankruptcies has been higher for sixteen months in a row than in the same month a year earlier, reports the Central Bureau of Statistics (CBS).
- number of bankruptcies increased again
- peak in May 2013, decline until 2017, increase since then
- trade bankruptcies in August; +52%
- transport & storage relatively most bankruptcies
According to Statistics Netherlands, twelve more companies were declared bankrupt in August than in July. That is an increase of 5 percent. The number of declared bankruptcies peaked with 911 in May 2013. After that, the number of bankruptcies decreased until August 2017. The trend then remained relatively flat until mid-2020. Since then, the number of bankruptcies has continued to decline, reaching a record low in August 2021. However, from May 2022, the number of bankruptcies was continuously higher than in the same month a year earlier.
Trade most bankruptcies
In August, 308 companies and institutions (including sole proprietorships) were declared bankrupt. Of all industries, trade had the largest number of bankruptcies, namely 86. That is 52 more than in July. However, the number of bankruptcies in the trade was relatively low in July. Compared to June, the increase was 20. Moreover, August had more court session days than in July and June.
Trade is one of the industries with the most companies. Relatively speaking, the most bankruptcies were declared in the transport and storage sector in August.
As a CFO, be proactive
According to lawyer Ruud Brunninkhuis van Buren, companies can take steps themselves against the consequences of bankruptcy: “It seems obvious, but it helps if CFOs are proactive in managing problems with suppliers and customers.” As an example, he mentions making good agreements in writing, for example about retention of title and the use of general terms and conditions.
Restructuring via WHOA
Another tip from the Brunninkhuis is to contact the right advisors in a timely manner. Nowadays, as a creditor, it is also possible to have a restructuring expert appointed via the WHOA legislation for a partner that is in danger of going through financial difficulties. “This restructuring expert can then establish a compulsory agreement with the aim of preventing bankruptcy of this partner and preserving as much value as possible for the stakeholders,” says the lawyer from the Hague office.
Rescue of companies through restructuring
Previously, the website for takeovers & mergers www.MenA.nl published an interview with Professor Omar Salah, professor at Tilburg University. He reflects on the restructuring practice of companies and on the changing culture surrounding companies that encounter financial problems. In it, the professor stated that more and more attempts are being made to keep companies afloat.
*This article was previously published on FM.nl.