New Insolvencies on the (slow) Increase
ASIC has just published the Corporate Insolvency statistics for March 2021. There were 439 new corporate insolvencies which includes Liquidations, Voluntary Administrations and the new Small Business Restructurings. 439 is a 28% increase over February 2021 which was 342 and is a 35% decrease from the previous (pre COVID) March 2020 (385). Since COVID, insolvency appointments have been well down on the corresponding month from the prior year, usually around 51%.
There were 253 new Voluntary Liquidations in March 2021. This was a 26% increase over the previous month (201), and a 25% increase over the average of the previous 12 months (202).
There were two new Small Business Restructuring appointments in March 2021 taking the grand total to five since the legislation started in January 2021. One of the three SBRs commenced in February progressed to become the first ever Restructuring Plan in March 2021.
New South Wales saw the largest increase with 165 new insolvency appointments. This was a 49% increase over February 2021 (111), and a 38% increase over the average of the last 12 months (120).
So whilst new insolvencies are trending upwards, they are still significantly less than pre COVID times. The new insolvency regime has not moved the needle on new appointments. We will be keeping a close eye on April 2021 to see what effect the end of JobKeeper payments brings.