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2014 Corporate Insolvencies Lowest in Years

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2014 has been the best start to the year for Australian companies since the GFC hit. ASIC’s latest release, covering February 2014, shows the lowest number for February (739) since 2008. This was a 23% decrease from  February 2013 (960) and a 19% drop from the average of the previous five Februaries (912). When combined with January 2014’s total of 511 ( the lowest January figure since 2010), 2014 has been the best start to the year for Australian companies since 2008.

2014 has been a particularly good so far for New South Wales. This calendar year has seen 456 insolvencies in NSW which is a 20% decrease from the average of the same time period over the last 5 years (568), and the lowest total since 2005 when comparing totals from the same time period.

When looking at types of Insolvency appointments in January and February 2014, numbers are low across the board, but particularly low for Voluntary Administrations and the resulting Deed of Company Arrangements. There have been 143 Voluntary Administrations so far in 2014 which is a 36% decrease from the same period in 2013, and the lowest number on record for the first two months of the year. Likewise Deed of Company Arrangements are at an all time low at 44, being a 15% decrease from 2013.

We expect insolvencies to be low in January( the courts are closed and most lawyers are skiing in Aspen), but there is usually a significant increase in February and this year that jump in numbers just hasn’t happened. In fact when looking at the stats, February 2014 saw a 45% increase in nationwide insolvencies over January 2014. This is the lowest percentage January to February increase on record.

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