Risk Watch Essentials - December 2021

Risk Watch Essentials - December 2021

The tables below summarise the data essentials captured from our daily Risk Watch publication, which provides a synopsis of the insolvency market for December 2021.

In addition to the tables below, three (3) companies appointed a Restructuring Practitioner during the month of December 2021 in relation to the Debtor in Possession restructuring process for small businesses.

Covid

The tables and graphs below show the Covid lockdowns and stimulus measures introduced towards the end of June 2021 have caused a material reduction in the number of reported insolvency events during July to October 2021 compared with June 2021. However, there was a slight increase in reported insolvency events during the month of November compared with the months of July to October and December 2021.

Notwithstanding the slight increase in reported insolvency events in November, the final graph below, when compared to the same time in 2019 indicates that the number of insolvency events in December 2021 is still approx 30% below pre pandemic levels.

No. of Registered Liquidators in Australia as at December 2021

Registered Liquidators Australia    NSW    VIC    QLD    WA    ACT    SA    NT    TAS
Total 652    250 (38%)    159 (24%)    113 (17%)    64 (10%)    9 (1%)    44 (7%)    3 (<1%)    10 (2%)

Winding Up applications filed with the Court in December 2021

Winding Up applications Australia    NSW    VIC    QLD    WA    ACT    SA    NT    TAS
Total 80    21 (26%)    38 (48%)    15 (19%)    4 (5%) 0 (0%)    2 (3%)    0 (0%) 0 (0%)

Analysis:

A total of 80 Winding Up applications were filed throughout Australia in December 2021, the majority of which were in Victoria (38 or 48%), New South Wales (21 or 26%), and Queensland (15 or 19%), and Western Australia (4 or 5%). There were smaller numbers of winding up applications filed in South Australia and none in Australian Capital Territory, Tasmania and the Northern Territory.

There were no winding up applications filed by the ATO in December 2021.

Formal Appointments in December 2021

Formal Appointments    Australia    NSW    VIC    QLD    WA    ACT    SA    NT    TAS
TOTAL 532 249 (47%) 140 (26%) 80 (15%) 22 (4%) 17 (3%) 19 (4%) 1 (0%) 4 (1%)
Court Liquidation 88 42 (48%) 31 (35%) 10 (11%) 1 (1%) 1 (1%) 3 (3%) 0 (0%) 0 (0%)
Creditors'/Members' Voluntary Liquidation 389 179 (46%) 100 (26%) 61 (16%) 14 (4%) 16 (4%) 14 (4%) 1 (0%) 4 (1%)
Voluntary Administration 55 28 (51%) 9 (16%) 9 (16%) 7 (13%) 0 (0%) 2 (4%) 0 (0%) 0 (0%)

Analysis:

There were a total of 532 formal appointments throughout Australia in December 2021, the majority of which were in New South Wales (249 or 47%), Victoria (140 or 26%) and Queensland (80 or 15%).

Comparison of Pre-Covid (2019) with 2021 Formal Appointments

The graph below shows the formal appointments on a month by month basis (January to December) pre-covid (2019) compared with 2021. The number of formal appointments continue to be well below the pre-covid numbers and show no sign of increasing to pre-covid numbers. This is likely due to some businesses continuing to rely on Government pandemic relief measures and others which are trading whilst insolvent in the hope of better days or have closed their doors but not entered formal insolvency.

Rodgers Reidy is one of the foremost providers of insolvency, forensic and reconstruction services to distressed businesses throughout Australia, New Zealand and Asia. With a strong commitment to integrity and the community, Rodgers Reidy provides a professional and quality service, offering innovative, cost effective solutions.  Please contact any of our directors by clicking the appropriate office below for an initial consultation free of charge.

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