THE NUMBER of companies seeking High Court protection from their creditors doubled in the second half of 2008 even after a sharp rise in the first half of the year, according to new analysis by accountants Grant Thornton.

In spite of the increase, which has seen two companies a week, and sometimes a day, seek examinership from the High Court, senior insolvency practitioner Mick McAteer said there has been a sharp reduction in the number of companies successfully emerging from the process.

Mr McAteer, whose firm Foster McAteer merged last year with Grant Thornton, said 26 Irish companies sought High Court protection in the year to June 2008 in contrast to eight companies in the previous year.

There was severe decline, however, in the number of companies that continued to trade after the 100-day examinership process, which affords investors time to reorganise the financial affairs of a company.

All companies that entered examinership in 2007 period survived, but more than three times as many firms ceased trading as survived in the first six months of 2008.

"These figures suggest that the wrong sort of companies may now seeking the protection of the High Court through examinership," said Mr McAteer, recovery and reorganisation partner in Grant Thornton.

"If we look specifically at the construction sector, in the first six months of this year, five companies sought examinership and only one of these was successful.

"The other reason that companies may be failing to successfully trade their way out of examinership, is a lack of access to finance," Mr McAteer added.

"The credit crisis has meant many companies are finding it increasingly difficult to get cash and thus they have little chance of survival. The manufacturing sector is proof of this, with five appointments in the first six months of 2008 and only one success story."

Grant Thornton said data from the latter half of 2008 suggested the examinership trend was becoming more pronounced.

"Initial figures would suggest that there were more than double the number of companies seeking the protection of the High Court in the latter part of the year, compared to the first six months."

Mr McAteer's colleague Paul McCann said the pattern was likely to continue this year.

"We are seeing up to two companies a week now at the High Court hoping to be placed in examinership, but these companies face a greater risk of being wound up due to the harsh economic circumstances they are operating in," he said.

"Companies will have a better chance of survival once credit becomes more freely available," Mr McCann added.

Companies currently in examinership include pub operator Thomas Read Holdings, women's fashion chain Sasha and asset manager First Equity Group, whose current projects are worth as much as €1 billion.