Risk Watch Essentials - September 2021

Risk Watch Essentials - September 2021

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

In addition to the tables below, four (4) companies appointed a Restructuring Practitioner during the month of September 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 September 2021 compared with June 2021. As illustrated in the final graph below, when compared to the same time in 2019 the number of insolvency events in September 2021 is approx 50% below pre pandemic levels.

No. of Registered Liquidators in Australia as at September 2021

Registered Liquidators    Australia    NSW    VIC    QLD    WA    ACT    SA    NT    TAS
TOTAL 649 248 (38%)    157 (24%)    114 (18%)    63 (10%)    10 (2%)    45 (7%)    3 (<1%)    9 (1%)

Winding Up applications filed with the Court in September 2021

Winding Up applications Australia    NSW    VIC    QLD    WA    ACT    SA    NT    TAS
TOTAL 129    37 (29%)    51 (40%)    24 (19%)    9 (7%)    5 (4%)    3 (2%)    0 (0%) 0 (0%)

Analysis:

A total of 129 Winding Up applications were filed throughout Australia in September 2021, the majority of which were in Victoria (51 or 40%), New South Wales (37 or 29%), and Queensland (24 or 19), and Western Australia (9 or 7%). There were smaller numbers of winding up applications filed in South Australia, Australian Capital Territory and none in the Northern Territory and Tasmania.

There was one (1) winding up application filed by the ATO in September 2021.

Formal Appointments Australia    NSW    VIC    QLD    WA    ACT    SA    NT    TAS
TOTAL 400 155 (39%) 95 (24%) 87 (22%) 30 (8%) 14 (4%) 18 (5%) 1 (0%) 0 (0%)
Court Liquidation 60 28 (47%) 14 (23%) 11 (18%) 7 (12%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Creditors'/Members' Voluntary Liquidation 298 118 (40%) 71 (24%) 67 (22%) 17 (6%) 10 (3%) 15 (5%) 0 (0%) 0 (0%)
Voluntary Administration 42 9 (21%) 10 (24%) 9 (21%) 6 (14%) 4 (10%) 3 (7%) 1 (2%) 0 (0%)

Analysis:

There were a total of 400 formal appointments throughout Australia in September 2021, the majority of which were in New South Wales (155 or 39%), Victoria (95 or 24%) and Queensland (87 or 22).

Comparison of Pre-Covid FY 2020 and FY 2021 Formal Appointments

The graph below shows the formal appointments on a month by month basis (January to September) 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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