Further company voluntary arrangements (CVA) are expected in the next few months as the lagged impact of the recession takes effect, according to restructuring expert KPMG.
While insolvencies have fallen in recent months, some retailers are expected to fail as the recovery in economy puts pressure on weakened companies to restock and pay down debt.
Brian Green, restructuring partner at KPMG, told the Financial Times: “We’ve proposed eight CVAs in the past year and our current pipeline suggests we will propose double this figure in 2010.”
KPMG is currently overseeing a CVA for Suits You-owner SRG, and has previously worked on CVAs for JJB and Blacks Leisure.
Green said: “The GDP figures may be the technical end of recession but the feeling on the street is far less clear cut… Cases such as JJB and Blacks Leisure, combined with insolvency regime reform, have prompted many distressed retailers to consider a CVA.”