Asset Solutions August 2022 Round-Up: The UK’s Latest Bankruptcy and Insolvency News & Statistics

collapsing business

This month we will cover the current state of UK businesses facing the mounting pressure of inflation, the collapse of Revlon and a case of mortgage fraud. We also cover insolvency statistics from July 2022.

You can read last month’s statistics here: Insolvency News & Statistics July

Inflation responsible for collapsing UK businesses 

The rate of inflation has caused an alarming trend over the past three months. Company insolvencies have been on the rise over the past quarter and have been significantly higher than in the same period last year.

A record-breaking number of insolvencies  

Between the 1st of April and the 30th of June, there have been a reported 5,629 insolvencies. This figure is backed by over 4,900 CVLs, the highest quarterly figure since records began in 1960.

What else is causing companies to fail?

The cost of living crisis is affecting the spending habits of consumers nationwide. Especially consumers on a low-income salary. These individuals are being forced to squeeze their budgets, damaging retailers and smaller businesses.

With the cost of living crisis expected to worsen, we can only imagine this will cause more businesses to collapse in the next quarter too at a similar rate.

Fraudulent mortgage leads to multiple convictions

Using a fake identity Cindy Brad was able to secure a £200,000 mortgage. By presenting counterfeit documents to her lender, she convinced them to give her possession of a property only to renege it later.

Cindy was only able to achieve this through her use of multiple fake identities and using the help of another individual, Selvi Civi. 

Second jail sentence

This is not the first time Cindy Brad has been convicted. In fact, back in 2009, the ex-financial advisor had been jailed for 18 months. Her 2009 conviction was due to her stealing from clients she was advising. Not only did she receive a jail term, but she also received a 10-year company director disqualification.

Her second jail sentence will see her face 3 years behind bars and be disqualified for a further 15 years. Selvi Civi, will be handed a 4-month-long sentence for aiding Cindy Brad with acquiring the loan.  

Glenn Wicks, Chief Investigator for The Insolvency Service, was happy about the rulings. “Thanks to the joint work between the Insolvency Service, the police and other government agencies, we were able to uncover Cindy Brad’s duplicitous activities. The courts recognised the severity of her actions and her 3-year sentence should serve as a warning that we will use the full extent of the law to investigate and prosecute fraudsters.”

Revlon for bankruptcy 

The American beauty and cosmetics company has filed for bankruptcy after 90 years of operation.

Supply issues 

The effects of the pandemic have taken a serious toll on the company. Consequently, in 2021 their sales dropped 22% from their figures in 2017. A significant reason for this has been the shortage of supplies caused by COVID-19. 

According to Revlon’s chief executive, Debra Perleman, this is just one of the many issues plaguing the business since 2018. “Our challenging capital structure has limited our ability to navigate macro-economic issues”. Then without having investments in other rising brands, they have limited their chances to work their way out of their financial struggles. Compare this to their competitor COTY, which owns stakes in Kylie Cosmetics and Kim Kardashian’s SKKN, which will provide them with years of financial stability. 

What do they owe?

The current figures show that Revlon has reached a debt surpassing $3bn. However, this is not the only time issues over their finances have been brought to our attention. The cosmetic company came close to filing bankruptcy in 2021 following a stand-off between its owners and the American financier Carl Icahn. 

If you are struggling with your current finances read our article on: How To Avoid Bankruptcy

England and Wales: Monthly Insolvency Statistics

Company Insolvencies during July 2022

  • There were 1,827 registered company insolvencies in July 2022:
    • 1,609 CVLs, this is 60% higher than in July 2021 and also 60% higher than in July 2019

Individual Insolvencies during July 2022

  • There were 1,835 DROs and 531 bankruptcies in July 2022
  • The number of DROs was 23% lower than in July 2019

If you are worried about debt, bankruptcy or possible insolvency, contact Asset Solutions today at 0800 689 3861. Our experienced team members provide unrivalled assistance to individuals throughout the entire insolvency process and help to stop bankruptcy. We understand that anyone facing problem debt is likely to feel overwhelmed and intimidated. That’s why we’re here to support you throughout the process and help you achieve the best results possible for your situation. Contact us today for more information.