Cité Judiciare;

Statec, Luxembourg's national office for statistics, has announced that 132 companies went bankrupt during October 2020, as declared by the commercial courts in the Grand Duchy; this compares to 125 companies in October 2019.

During the first ten months of 2020, a total of 988 legal units were declared bankrupt. This figure is in the same order of magnitude as that for the same period in 2019 (1,017 bankruptcies) and in 2018 (936 bankruptcies).

Apart from holding companies and investment funds which constitute a separate economic branch, these are mainly businesses in commerce/trade (169 bankruptcies in 2020) and construction (98 bankruptcies in 2020). Compared to the total number of businesses by branch of economic activity, bankruptcies concern 2.5% of hospitality companies, 2.5% of construction and 2.3% of trade/commerce. The other economic branches are relatively less affected.

During the first half of 2020, bankruptcies generated a loss of around 900 salaried jobs. This value is however below the levels of the first half of 2019 (1,009) and 2018 (1,043). The economic branches deploring the greatest loss of jobs are non-financial services (26%) and construction (24%).

Half of the companies declared bankrupt between January and June of the current year have no employees. In general, most bankruptcies concern companies which have been operating for more than 5 years.

The bankruptcy statistics are based on the record of court decisions, taken from the Commercial Register up to 2 November 2020. 

A new tool to better understand which companies go bankrupt

Meanwhile, Luxembourg's Ministry of Justice has initiated, in collaboration with STATEC, the Luxembourg Business Register (LBR) and the Statistical Service of Justice, a project for the regular publication of statistics on insolvency proceedings (bankruptcy).

As a first step, statistics on the number of bankruptcies declared monthly are now published, detailing the number of bankruptcies according to the types of activities and the length of service of the companies declared bankrupt, as well as the number of employees employed in these companies. Statistics on the activity and age of companies declared bankrupt will be updated monthly, while those relating to the number of employees will be updated on a half-yearly basis.

These statistics will continue to be developed regularly to provide more information on companies declared bankrupt.

According to the Minister of Justice, Sam Tanson, these statistics will be an important tool to closely monitor the evolution of the number of bankruptcies and to derive information on the typology of companies that are declared bankrupt. This tool is all the more important in the context of the current health crisis, which has an immediate impact on the activity of many businesses.

The Minister also underlined that the production of these statistics is the result of intensive digitisation efforts carried out for many years at the level of the Trade and Companies Register (RCS) managed by the LBR, of the Central Balance Sheet Office managed by STATEC, and by the courts.