Corporate bankruptcies increased by half in 2009. In total, almost 5000 companies filed for bankruptcy

In 2009, 1480 corporate bankruptcies were declared in the Czech Republic with 86 per cent relating to legal persons and 14 per cent to natural persons (entrepreneurs). Altogether there were 42 per cent more corporate bankruptcies declared than in 2008. The total number of companies and entrepreneurs filing for bankruptcy, on the other hand, saw an even steeper rise, with an increase of 65 per cent on the previous year with a total of 4754. Data come from statistics contained in the business information database Cribis.cz, which is regularly published by CCB – Czech Credit Bureau. ​
 

“While in 2008 the share of bankruptcies actually declared by natural and legal persons was only 36 per cent of bankruptcy claims, in 2009 this share was less than 31 per cent. The fact that the number of bankruptcy claims rose faster than the number of declared bankruptcies means that the queue of claims awaiting resolution is becoming longer and longer,” explained Věra Kameníčková, Head of Analytics at CCB – Czech Credit Bureau, which operates the business information database Cribis.cz.

In 2009, a monthly average of 106 bankruptcies were declared by legal persons and 17 by natural persons–entrepreneurs. In 2008, a monthly average of 71 bankruptcies for legal persons and 12 bankruptcies for natural persons–entrepreneurs were declared. An average of 396 insolvency claims were filed every month in 2009 by legal persons and entrepreneurs while in 2008 this average was only 240 claims a month. 

In December 2009 alone, 106 bankruptcies for legal persons and 21 bankruptcies for natural persons–entrepreneurs were declared, which means a monthly increase of eight companies. However, there were 486 corporate bankruptcy claims filed in December, which is 137 more than the 349 proposals filed in December 2008. 

A total of 3980 personal and corporate bankruptcies were declared in 2009, with corporate bankruptcies making up 37 per cent of the total. In 2008, 1761 bankruptcies were declared in total, with corporate bankruptcies making up 59 per cent. The total number of bankruptcy claims in 2009 reached 8687, with corporate bankruptcy claims making up 55 per cent of the total. In 2008, 4531 bankruptcy claims were filed out of which 60 per cent were corporate bankruptcy proposals.

„We can expect the number of bankruptcies, especially personal bankruptcies, to keep rising in 2010. We also expect to see more corporate bankruptcies, especially in the first half of the year. Among the main factors influencing this development are the slow recovery of international economic growth; the negative trend in salaries in the Czech Republic; the slow increase in the number of jobs; and furthermore, albeit moderate, the rise in unemployment rates,”predicts Věra Kameníčková.

TABLE: Bankruptcy proposals and declared bankruptcies / legal persons (LP) and natural persons–entrepreneurs (NPE)



Source: CRIBIS.cz, CCB - Czech Credit Bureau, a.s.

Notes: 
LP = legal persons = corporations (a.s., s.r.o., k. s. v.o.s.)
NPE = natural persons–entrepreneurs