Welcome to our first client update of 2010 and once again we find ourselves in interesting times. Following a period of calm towards the end of 2009, the start of 2010 has brought a marked increase in restructuring activity.

Following the sharpest falls in GDP since the Second World War, the UK economy finally crawled into positive territory in Q4 of 2009. However, the recovery is fragile and there remain a number of very significant downward pressures on the economy which will make 2010 a highly challenging year for corporates. We look at some of the challenges facing management teams in our article entitled "Managing out of a recession".

In terms of sectors, 2009 was undoubtedly dominated by Property & Construction and Retail. We have included updates for both these sectors in this edition and we also include a summary of our recent KPMG Automotive Survey. Automotive hit the restructuring radar in early 2009 and it is clear that there remain significant challenges facing manufacturers, the supply chain and retailers - and these challenges existed before Toyota's recent difficulties.

In a section entitled 'Recurring Themes', we provide an update on three topical areas namely; HMRC, CVAs and Landlord v Tenant as well as an update on our Mid Market Debt Advisory Group. As usual we also provide a summary of recent engagements to give you a flavour of our work around the country.

Please feel free to contact me if you would like to discuss any aspect of this update or other restructuring issues.