Bankruptcy race

[Legal Beagles]

In the court as 240 companies go bust in a single day

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[enaid]

Re: Bankruptcy race

Bankruptcy at breakneck speed


By Clare Matheson
Business Reporter, BBC News


The numbers attending the weekly winding up court are unlikely to decline

By the end of his day in court, no wonder the barrister representing Her Majesty's Revenue and Customs has nearly lost his voice.
The court has heard 240 cases - an average of one every 90 seconds - and Mr Daniel Margolin has had a part to play in most.
And looking at the evidence around, the companies court at London's Royal Court of Justice are unlikely to get any quieter.
Even the member of staff on reception admits: "The case list is getting longer and longer. It's not going to improve any time soon."
The latest analysis from PricewaterhouseCoopers (PwC) says the downturn is showing "no signs of abating" with 5,483 firms becoming insolvent in the first quarter of 2009, up 57% on the same time last year.
"We can see that UK businesses are still suffering from the effects of the global recession as more and more of them enter into insolvency with no apparent signs of a slowdown in the near future," says Mike Jervis, partner in PwC's business recovery services practice.
Jam packed
The problems facing UK businesses is set out in a very human form in Court 55 on The Strand in London.
As it opens at 10.30, 22 barristers are crammed into the benches with files and boxes full of legal papers tied with white ribbon littering the tables.
Soon after the crowds rise for Mr Registrar Jaques, who's hearing the cases, the atmosphere in court 55 resembles an auction house more than a legal platform.
Within seconds the first case against Crystal Vision LCD TV Ltd is dismissed as their papers are not in order. The following company Freemarket is dealt with in under a minute.
The third company wins a 14 day adjournment and, another firm is compulsorily wound up and yet another wins a vital 28 days to pay its creditors.
And the list goes on.
Herded through
Case numbers and names are rattled off, while barristers will argue a company - or creditor's - case, with the judge delivering his decision, all at breakneck speed.
More firms are set to face financial problems as the recession continues

The most frequent ruling is delivered with the words: "All the papers are in order, usual compulsory order, main proceedings."
With that one sentence the firm is wound up.
By 11.10am, 58 cases have been heard, and herded, through the system, and yet the tide of managers, directors and barristers keeps coming.
Some bosses show the stress of the day, hesitating and stuttering their way through their all-too-brief time in the spotlight.
One director, sweating profusely, begs for the court to offer some extra time to draw up a banking order to pay of his debts, claiming that the Easter holidays delayed him getting his hands on the cash in time.
The plea falls on deaf ears and the firm is wound up - the words "compulsory order granted" ringing around the room as the chairman of Camp Lane Development Company exits the court with his colleagues.
Another manager asks the registrar whether he can have extra time to discuss his case. "No you may not," is the abrupt retort.
Unfortunately, this company will be just one more added to the pile of statistics at the Insolvency Service.
'No messing'
By the end of the morning session, at 1.15pm the court has swiftly sealed the fate of 236 companies - a fact not missed by the solicitors on the sidelines.
As they exit the court to grab a bite, one remarks that the Registrar was taking "no messing today. 'Can we have 10 more days'. 'No, next'.'"
A further four companies are granted a little more time to be dealt with in greater detail after the lunch break, while two from the earlier hearings are revisited.
Greater detail, it emerges, means at least three or four minutes a case as the recorder asks the remaining four barristers how long each case will take.
Here Mr Margolin usually raises concerns or haggles over the costs involved in the cases or length of time their payment will take.
One case, KBSA Inc Ltd gets a little extra attention as Registrar Jacques advises two foreign creditors on how the English legal system works, but by 3pm the court has risen and the barristers are packing up for the office.
By the next winding up session on the following Wednesday business is unlikely to be any quieter, but Mr Margolin may have had time to recover his voice.