Five Bankruptcies Per Day Across Alicante Province

The so-called global factors of Covid, international conflicts, and the cost of living, are all said to be contributing to difficulties for business owners, and 2023, so far, has not shown any let up, with, from January to September, no less than 1,347 bankruptcy proceedings having been declared in the Commercial Courts of the province of Alicante (between companies, self-employed individuals and non-business individuals), which represents practically five a day since the beginning of the year (4.98 daily average).

This figure practically doubles in just nine months the bankruptcy proceedings that were declared in the province of Alicante in the entire year 2022. Then there were 723 procedures opened in the Commercial Courts of the province in the entire year. With three months left to finalise the 2023 statistics, the data from the General Council of the Judiciary (CGPJ) already shows an increase of 86% in the province.

The worst quarter of the current year was the second, when 527 bankruptcy proceedings were declared in the province of Alicante. All in all, in the third quarter, which includes the month of August, there were 392 insolvency procedures opened in the province’s courts. These data are part of the report ‘ Effects of the crisis on judicial bodies ‘, which the CGPJ prepares quarterly with the information sent by the Superior Courts throughout Spain to assess the impact of the economic situation on related judicial procedures.

Regarding the third quarter, the 392 bankruptcies declared in Alicante represent an increase of 88.5% compared to the same period in 2022 in the province, in line with the annual data. Throughout the Valencian Community, the evolution of bankruptcy proceedings was 105%, according to the report, which represents more than doubling the number of bankruptcy proceedings opened in the third quarter of last year. In total, 1,175 contests were declared.

The number of zombie companies (those that are technically bankrupt but continue to operate by refinancing their debt) has been reduced by 40% in the Valencian Community in the last year, according to data from the specialised consulting firm Iberinform. From the 5,000 companies that the same report counted in 2022, there has been a rise to just over 3,000 that remain in 2023. The counterpart to this ‘cleaning’ of vulnerable companies is, logically, the sharp increase in bankruptcy proceedings that (despite to the change in the bankruptcy law that seeks to avoid them) has occurred in the same period.

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