Crisis ‘not the cause of most bankruptcies’

Common belief that the economic downturn is to blame for most bankruptcies has been debunked by an insolvency expert.The Creditors’ Protection Association of 1870 (KSV) announced today (Thurs) that only 19 per cent of all of last year’s 6,376 business bankruptcies had firm-external and crisis-related grounds.The organisation claimed 44 per cent of all of the companies which went broke in 2010 lacked organisation and functioning internal allocation of responsibilities. Many of them failed to succeed due to bloated structures, KSV stressed.The association also pointed out that a large number of businesses which had gone bust in the meantime failed to make the most of their productive potential due to excessive costs and bad decision-making sparked by an ever-rising number of rivals.KSV said earlier this year that approximately 23,600 employees had been affected by last year’s business insolvencies.Meanwhile, a poll conducted by Ernst & Young revealed that just 34 per cent of Austrian company staff and firm chiefs believe that corruption is common in business deals.