Record number of bankruptcies

27/10/2003 10:00

According to provisional figures form Statistics Netherlands, Dutch courts declared 6,400 businesses, institutions and private persons bankrupt in the first nine months of 2003. This the highest number ever counted in the first three quarters of a year.

Bankruptcies pronounced per quarter, 1980-2003

Bankruptcies pronounced per quarter, 1980-2003

Substantially more bankruptcies than in 2002

In the first nine months of 2003 nearly 4,800 companies and institutions and 1,600 private persons were declared bankrupt. The total number of bankruptcies in the first three quarters of 2003 was 30 percent higher than in the same period in 2002.

This continues the increasing trend in the number of bankruptcies, which began in the second half of 1999 as a result of unfavourable economic developments.

Four in ten businesses failed within five years

Four out of every ten businesses and institutions declared bankrupt had existed for less than five years. Compared with the average period of existence in the period 1995-2000 this proportion has decreased by 7 percent points. One in three bankrupt businesses had been in business for ten years or longer. This proportion was slightly higher than the average for the period 1995-2000.

Businesses and institutions declared bankrupt by period of existence

Businesses and institutions declared bankrupt by period of existence

Mismanagement main cause of bankruptcy

According to Statistics Netherlands’ survey, which includes information on the completion of bankruptcy proceedings, for one third of companies and institutions declared bankrupt, mismanagement was the main cause. Other common causes were economic factors (20 percent) and bankruptcies of the holding, mother, sister or subsidiary companies (15 percent).

Bill Swaager