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Wave of pub insolvencies expected once moratorium on petitions is lifted

27 April 2020 by
Wave of pub insolvencies expected once moratorium on petitions is lifted

Winding up petitions against pubs and bars are up 73% on 2019, with a wave of insolvencies expected when the moratorium on coronavirus-related petitions ends on 30 June.

According to accountancy group UHY Hacker Young, there have been 26 petitions to wind up pub and bar companies so far this year, with the fall in customers in the lead up to the lockdown pushing struggling businesses over the edge.

The group said that hundreds more businesses were surviving only because of understanding creditors and the furlough scheme.

But the accountants predicted that this good will would not last and that, with pubs expected to be the last businesses to open, creditors would act after the moratorium on petitions was lifted and seek to wind them up in order to get what they could from the remaining assets.

Partner at UHY Hacker Young partner Peter Kubik said: "The rise in winding up petitions for pubs since the start of the year is noticeable but unfortunately for the pub and bar industry the crisis is far from over.

"The government has threatened that pubs will be one of the last businesses out of the lockdown.

"Thankfully the majority of creditors are being patient and are not yet pursuing unpaid bills by seeking to wind up pubs. That cannot go on indefinitely, however.

"If pubs aren't able to reopen and start generating income soon, there is likely to be a wave of insolvent pubs."

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