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Company liquidations rise

By Kea' Modimoeng | Jan 26, 2010 | COMMENTS [ 0 ]

THE global economic recession remained strong and burdensome on South African companies even during the festive season.

This resulted in more liquidations recorded for December last year compared with the previous year.

The total number of liquidations recorded for last year increased by 25,2percent from 3300 in 2008 to 4133.

On a month-on-month basis, the total number of liquidations recorded for December last year compared with December 2008 increased by 10,1percent from 347 to 382.

Stan Dewey, a lawyer with Matjila, Hertzberg & Dewey Attorneys, said the increase in liquidations for last year could be attributed to the global economic recession and SA's legal system.

He said it was "much quicker" to get money through liquidation than any form of issued summons.

"What we are seeing here is the knock-on effects of the economic recession, and in the legal field we experienced chains-of-default payments where one party doesn't pay the other, and then another person is not paid as a result."

He said the "good news" was that, on the contractual side, government deals were picking up and this would assist distressed companies.


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