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Corporate Insolvencies see a number of “Highest Evers” whilst VAs are the “lowest ever”!

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The most recent release of ASIC insolvency statistics reveals that 2011 is well on the way to setting new highs in the number of corporate insolvencies.  Liquidations and receiverships are up whilst voluntary administrations are at an all time low.

Statistics have been kept in the current format since 1999, and 2011 has seen a number of “highest ever” numbers:

  • The number of companies entering some form of insolvency administration in the month of July 2011 was 921. That figure is down from June, which was 1,027 but is the highest July ever.
  • The months of March, April, June and now July 2011 have been the highest ever for each of those months.
  • The calendar year to July 2011 is the highest ever.
  • In the year to July 2011 there were 1,355 appointments by Secured Creditors, which will be predominantly Banks appointing Receivers.  Again that is the highest number on record.

This is more bad news about the state of corporate Australia.  Insolvency numbers have been on the rise in 2011 and July is yet another record high.

The same factors are at play which we have identified previously.  The number of liquidations is high and going higher.  Interestingly, the number of Voluntary Administrations, which have the stated purpose of saving a business, is the lowest ever on a 12 month basis.  This suggests that we are seeing a lot of companies that have previously ceased to trade being given their last rights. Most of those companies originally stuck trouble in GFC part 1.

The “lowest ever” number of VAs is not a surprise to me either.  I published a blog a few weeks ago where I explained why I thought VAs had completely failed to achieve their stated objective.  You can read more on that here.

We are yet to see the full effect of recent troubles in the retail sector.  So we expect that the numbers will continue to be poor through to the end of 2011.

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