Risk Watch Essentials - December 2020

Risk Watch Essentials - December 2020

Covid Analysis

The tables and graphs below show that the COVID-19 stimulus measures introduced have had a drastic effect on the number of insolvency and winding up procedures.

For the final quarter (October to December) of 2020 compared to the final quarter (October to December) of 2019, the data indicates a significant reduction in the number of reported events, in particular, Winding Up Applications and Court Liquidations.  However, there was an increase in activity of the number of Voluntary Administration and Voluntary Liquidation appointments in December 2020.

  • Winding up Applications are down by 93% for the quarter.  The ATO filed two (2) winding up applications in October 2020 and no winding up applications in November or December 2020.  This is consistent with our understanding that during this period the ATO is more focused on business support measures than recovery procedures;
  • Court Liquidations are down 90% for the quarter.
  • Voluntary Administrations are down 30% for the quarter, however, after adjusting the figures to record multiple companies in a group as a single appointment (e.g. Grocon Group), Voluntary Administrations are down 49%.  Interestingly, the total number of Voluntary Administrations in December 2020 compared to December 2019 actually increased by 30%.
  • Voluntary Liquidations are down 25% for the quarter.  However, the number of Voluntary Liquidations in December 2020 compared to December 2019 was a difference of only one (1) appointment.

Risk Watch Essentials - December 2020

The tables below summarises the data essentials captured from our daily Risk Watch publication, which provides a synopsis of the insolvency market for December 2020.

No. of Registered Liquidators in Australia as at December 2020

Registered Liquidators Australia    NSW    VIC    QLD    WA    ACT    SA    NT    TAS
TOTAL   640    245 (38%)    159 (25%)    108 (16%)    63 (10%)    10 (2%)    45 (7%)    2 (<1)    8 (<1%)

Winding Up applications filed with the Court in December 2020

  Australia    NSW    VIC    QLD    WA    ACT    SA    NT    TAS   
TOTAL 21    4 (19%)    13 (62%)    2 (10%)    2 (10%)       0 (0%)     0 (0%)      0 (0%)    0 (0%)

Analysis:
A total of 21 Winding Up applications were filed throughout Australia in December 2020, the majority of which were in Victoria (13 or 62%) and New South Wales (4 or 19%). There were no winding up applications filed in the Australian Capital Territory, South Australia, Northern Territory or Tasmania during December 2020.

Formal Appointments in December 2020

Formal Appointments Australia    NSW    VIC    QLD    WA    ACT    SA    NT    TAS
TOTAL 643    316 (49%)    183 (28%)    108 (17%)    32 (5%)    19 (3%)    20 (3%)    1 (0%)    4 (1%)
Creditors'/Members' Voluntary Liquidation 507 244 (48%) 104 (21%) 95 (19%) 23 (5%) 19 (4%) 17 (3%) 1 (0%) 4 (1%)
Court Liquidation 29 15 (52%) 7 (24%) 3 (10%) 3 (10%) 0 (0%) 1 (3%) 0 (0%) 0 (0%)
Voluntary Administration 107 57 (53%) 72 (67%) 10 (9%) 6 (6%) 0 (0%) 2 (2%) 0 (0%) 0 (0%)

Analysis:
There were a total of 643 formal appointments throughout Australia in December 2020, the majority of which were in New South Wales (316 or 49%), Victoria (183 or 28%) and Queensland (108 or 17%).

Click here if you would like to learn more about Risk Watch and subscribe.

Menu