THE PEAK OF COMPANY BANKRUPTCIES IS NOT OVER YET

A dramatic surge in bankruptcies of companies and a wave of insolvency cases has flooded courts throughout the country, showed information of Klassa. The figures clearly indicate a double-digit growth in new cases. The increase in the number of cases in smaller towns is 20%, while in Sofia and Varna it is three times higher - over 60%. In 2010, in the capital, declared insolvent companies, by request on the part of creditors, were up by 30% year-on-year. Declared insolvent companies, by request on the part of debtors increased by 40%, reported officials from Sofia City Court to Klassa. At the beginning of 2011, growth has further accelerated to reach 70%, experts pointed out.

According to Georgi Dichev, Chairman of the Chamber of Private Enforcement Agents (CPEA), the peak in new cases is not expected to be over in 2011. “Cases come to us with a delay of 6-12 months because of the nature of the process. First they are tried by the courts and, then, these can be appealed etc. An economic recovery has to be felt first and BNB must report a decline in the number of bad loans in order for the positive trends to become more feasible in our business,” told Klassa Dichev. General data for 2010 on the number of cases and the amounts collected by private enforcement agents will be released in late January-early February. But in the first six months of 2010 alone, CPEA recorded a total of 65,000 new cases, compared to 110,000 in 2009 and the collected amount stood at BGN 260 mln, compared to BGN 365 mln in 2009