The Dissolve Insolvency Index measures the number of companies entering some form of insolvency administration such as Liquidation, Voluntary Administration or Receivership.
The number of companies entering some form of insolvency administration in the 12 months to the end of September 2015 has decreased by 4% to 9,668 companies when compared to the average of the previous five years. The data is graphed at Company Insolvencies per Year. The number of companies entering some form of insolvency administration in September 2015 was 1,091, which was a 37% increase over the prior year September and 24% increase from the average of the previous 5 September.
We have also developed a reliable measure of the ratio of successful corporate restructurings by comparing the number of companies that successfully execute a Deed of Company Arrangement against the number of companies that enter some form of insolvency administration. A Deed of Company Arrangement, or DOCA, is essentially a deal agreed by a company with its creditors as part of the Voluntary Administration procedure. We found that only 4.1% of companies entering some sort of insolvency administration successfully execute a DOCA. There has been a decline from 14.2% in 1999 to the current level. The data is graphed at Restructurings as a percentage of Company Insolvencies. This reveals a very low success rate in restructuring Australian companies that strike financial difficulties with only 1 in 25 companies entering a formal insolvency administration finding their way through the insolvency legislation and creditor negotiations to agree a restructuring.
Click on the following links to find more details and some graphs of relevant statistics:
- Statistics for a summary of all relevant statistics and our comments
- ASIC statistics for an overview and our comments on the ASIC statistics
- Company Insolvencies per Year
- Restructurings as a percentage of Company Insolvencies
- Insolvencies by Industry