An empirical snapshot of English corporate insolvencies

Abstract

The article presents an empirical study of English corporate insolvencies initiated between December 2016 and December 2018. The research focuses on creditors' voluntary liquidations (‘CVLs’), the most frequently occurring insolvency procedure. It also looks at a few administrations and compares findings with CVLs to analyse which procedure may lead to better returns to creditors. The article highlights key statistics such as the average costs of procedures and the impact of the prescribed part fund on distribution. Further, the study assesses HMRC's potential debt recovery following its return as a preferential creditor and discusses whether Crown preference is justified. Given that data analysis on the practicalities of distribution during insolvency is lacking, the empirical study arguably helps fill a gap in the literature. Essentially, the article provides quantitative data on the practicalities of distribution and assesses the impact of the order of priority on repayment to creditors.