THERE has been a fall in the number of companies which became insolvent during the year and the trend is expected to continue in 1997, according to figures published yesterday by the Irish Trade Protection Association (ITPA).
The association, which provides information on companies and their credit ratings, found that the number of insolvencies this year was 3.4 per cent lower than in 1995.
The figures "confirm the continued improvement in the economy", according to the association.
The total number of liquidations fell to 636 this year from 652 last year, according to the ITPA. It says the reduction in insolvencies is much more dramatic when one considers that there were 158 voluntary liquidations, compared to 120 for 1995.
"Voluntary liquidations occur mostly from restructuring and all creditors are paid in full," says the ITPA.
"Perhaps the only worrying trend in the overall statistics is that the majority of insolvencies were with small/medium sized enterprises," it says. "This is a continuation of the 1994/1995 trend."
The study found that the number of receiverships has also continued to fall. This year 34 companies went into receivership, compared to 41 in 1995.
"There is a reluctance by banks and financial institutions to appoint receivers," it says, adding that this trend is also likely to continue next year.
It has also found that the number of companies going into examinership has fallen significantly. "It would now indicate that this legislation is falling in line with its original intention," it says.
When a company is granted examinership, it is under the protection of the courts. This prevents a run on whatever monies may remain in the firm, due to demands for payment from creditors.
High profile examinerships this year included CelticVision and CityJet.
The ITPA study also found that there had been a dramatic fall in the number of judgments registered against businesses and individuals - again confirming the boom in the economy.
"The reduction has taken place despite the fact that the Revenue Commissioners have been steadily increasing the number of registered judgments over the past couple of years," says the ITPA.
Its figures show that this year the Revenue Commissioners registered 1,089 judgments, compared to 805 last year and just 547 in 1994.
