Galway business failures having a crippling knock-on effect

Date Published: 26-Jul-2010

BY ENDA CUNNINGHAM

The increasing level of business failures in Galway – up by more than one-third in the first half of 2010 – is having a crippling knock-on effect on other companies, experts have warned.

Newly-published statistics show the number of company creditors’ meetings in Galway during the first half of this year was up by around 35% on the same period last year.

Now, solvency experts have warned the trend is set to continue, as more and more companies face collapse because of the economic downturn.

As a result, the level of business failures is having a knock-on effect on other companies that are owed money.

Figures for creditors’ meetings in Galway – convened when a company is facing liquidation – show a 35% increase in the first six months of this year compared to the same period in ’09.

ICC Information report 16 creditors’ meetings held here during the first quarter of 2010, and 15 in the second quarter (up from 11 and 12 during the respective quarters last year).

Paula Carney, Head of Risk Management Solutions with ICC Information said: “These results show reflect the significant challenges facing businesses and counties throughout Ireland, and a continued acceleration in the number of distressed companies across the economy.

“More worrying is the huge amounts of money that these companies owe to other companies which essentially continues the cycle of debt default risk in the economy,” she said.

Ms Carney warned firms to pay more attention to whom they extend credit facilities.

Galway had the third highest level of creditors’ meetings in Ireland during the first six months of the year, after Dublin (349) and Cork (42).

Read more in this week’s Connacht Sentinel