Bankruptcies in Luxembourg surge to record high

The number of bankruptcies in Luxembourg hit a record high last quarter, with a significant increase seen in the hotel and catering sector across 2022, Luxembourg’s statistic agency said on Thursday.

388 companies were declared bankrupt in the fourth quarter of 2022, 83 more than during the same period in the previous year, Statec said.

"It remains to be confirmed whether this is a pure catch-up effect, or whether the phenomenon will increase over the next few months," Statec said in a press release.

The jump comes as Luxembourg companies are battling high inflation and in particular rising energy prices, just as the threat of Covid-19 related lockdowns had vanished. The number of companies filing for bankruptcy had fallen by almost 25% in the first nine months of 2022 before they rose again.

The hotel and catering sector saw 115 bankruptcies last year alone, a 69% jump from the previous year when they were benefitting from pandemic-era government support.

In total, 1,050 companies were declared bankrupt in 2022, slightly lower than 2021, while 846 companies were put into liquidation last year. Luxembourg’s courts ordered the liquidation of 278 companies in the fourth quarter of 2022, an increase of 14% compared to the same period in 2021.

Half of the companies liquidated last year were holding companies and investment funds, Statec said.

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