NEARLY one in two insolvent companies in the North-East fail because of poor management decisions, according to the findings of a study.

The research carried out by The Association of Business Recovery Professionals, R3, reveals on top of this that more than half of insolvent companies have had previous financial difficulties, but have failed to learn from their earlier lesson.

Firms still do not ask for help early enough when they hit a crisis, so find themselves back in the same position and struggling to cope.

Chairman of R3 for the North-East region, Harvey Madden, said: "Poor management leads to corporate failure and puts jobs at risk.

"The government's recent report on company rescue discusses the need for managers to become better educated and R3 fully supports this recommendation.

"Across the country, 520,000 jobs were put at risk, and on average creditors lose 85 per cent of their debt, primarily because mangers lack financial and managerial skills."

R3 is also calling for creditors to take an enlightened attitude towards customers in trouble, and has produced two free booklets for business wanting to know what to do in a crisis.

Understanding Insolvency, and The Ostrich's Guide to Business Survival are available by calling Harvey Madden on (01642) 790790.