New Insolvency Appointments Remain Low
Now that Australia is officially in recession, you’d expect lots of companies to be entering some form of insolvency. That’s still not the case.
In a similar vein to my recent article on the topic, the government Coronavirus stimulus measures appear to be propping up a large number of companies that would have otherwise entered insolvency.
Preliminary figures for May 2020 are indicating there were 420 new insolvency appointments for the month, down 36% from 656 appointments in the same period in 2019. If confirmed it will be the slowest May for Insolvency appointments since 2000.
What’s more, the first week of June looks to have been slower still at 60 appointments. This is by far the lowest week this year, and a long way off the average of 123 Insolvency appointments per month for 2020.
All the talk in the Insolvency Industry is when the “wave” is coming. There might be an increase come July 1 when most businesses in NSW are heading back to work. Lots of pundits are pointing to September 25 when JobKeeper ends, Insolvent Trading laws kick back in and Rental Provisions end. The bulk of it may be as late as next year if the ATO continues to go slow on debt pursuit
Brad Vincent
Brad is the Senior Advisor at Dissolve. After 10 years of being an advisor, Brad has developed an excellent understanding of the legal and practical issues facing a director of an insolvent company – it is rare for a director to throw a new situation at Brad. You will find him understanding and sympathetic, but above all practical. Brad will provide the cool head in a stressful situation.
