Since 2022, the corporate bankruptcy rate in the UK has reached a 14 - year high, and many of them are large enterprises with a long history. For example, Wilko, founded in 1930, declared bankruptcy due to sluggish sales and huge debts. High inflation and consecutive interest rate hikes have reduced the consumption power of the British people, decreased corporate profits, and increased financing costs. Last year, the number of bankruptcies of British companies exceeded 22,000, and the number in the first half of this year has reached 13,000. Among all the bankrupt enterprises, 97% are small companies.

The inflation rate in the UK has continuously exceeded expectations, leading to an increase in the cost of living and the financing cost of enterprises. The Bank of England has raised interest rates 14 times in a row to combat inflation. This has made many small and micro - enterprises face higher loan costs and ultimately go bankrupt. The combined pressure of high financing costs and rising labor costs has pushed more enterprises into trouble.

Risk Warnings for Export Enterprises?

For export enterprises that have business dealings with British companies, it is recommended to conduct a risk assessment before trading with British buyers and control the transaction scale. In addition, when the buyer enters the bankruptcy process, export enterprises need to pay attention to key links such as creditors rights registration, participation in the creditors meeting, and understanding of the buyers bankruptcy process to protect their own interests.

How to Deal with a Bankrupt Buyer?

Act Immediately:After receiving the notice of the buyers bankruptcy, the export enterprise should take immediate action to understand the type of the buyers bankruptcy and the corresponding bankruptcy procedures.
Creditors Rights Registration:It is necessary to register creditors rights within the specified time to ensure that ones rights and interests are not damaged. The export enterprise should prepare relevant trade documents, such as contracts, invoices, and orders, to support its creditors rights registration. If the deadline for creditors rights registration is missed, the export enterprise should take remedial measures as soon as possible.
Actively Participate in the Bankruptcy Process:Export enterprises should actively participate in the buyers bankruptcy proceedings, including attending creditor meetings, communicating with the bankruptcy administrator, etc., to ensure the maximum protection of their rights and interests.
4、Consider Continuing Cooperation:In some cases, the bankrupt buyer may continue its business. The exporting enterprise can consider continuing to cooperate with it on the premise of ensuring its payment ability.
5、Key Supplier Strategy:If possible, the exporting enterprise should apply to become a key supplier of the bankrupt buyer. This can not only ensure its rights and interests during the bankruptcy process, but may also obtain more favorable trading conditions.
6、Legal Consultation:Considering the complexity and differences of bankruptcy laws in various countries, the exporting enterprise should seek legal consultation at an appropriate time to ensure that it follows the correct procedures and safeguards its rights and interests to the greatest extent.

During the stage of distribution of bankruptcy property, the exporting enterprise also needs to pay attention to confirming its information and providing relevant collection accounts.