Australia awakens from insolvency ‘COVID coma’
Why it’s crucial to act quickly
Formal insolvency appointments are on the rise (see graph below). This year there’s been an increasing number as COVID support measures were wound up, the ATO ramped up debt collection, banks and landlords got tougher, and the business and personal economic challenges started to bite.
The construction sector, in particular, has been a major concern because of huge challenges. Each week it seems there’s been another construction/building company collapse highlighted in the media. But other sectors, too, have been (and continue to be) under pressure (see below) due to labour shortages, global materials shortages, rising prices and reduced access to finance.
At Jirsch Sutherland we’ve been handling a wide range of matters across the country for business small to large and across a variety of industries. From Small Business Restructurings (SBRs), Voluntary Administrations, Creditor Voluntary Liquidations to Court-appointed liquidations. We’ve also seen a large uptick in inquiries from accountants and directors regarding businesses that are in financial distress or regarding restructuring to address legacy debt and get the business back on track.
However, there are still those not taking action, or who might be ignoring warning letters from the ATO regarding outstanding debts.
Those who ignore attempts at contact will likely be among the first businesses ultimately subjected to winding-up proceedings enacted by the ATO.
Our advice? Speak with us in the first instance. We can provide guidance on the best option to deal with the individual circumstances. It’s confidential, it’s obligation-free. The sooner you act, the more options there might be and the sooner pressure can be relieved.
Chart 1.1.2: The first time a company enters external administration or has a controller appointed–Appointment type, FINANCIAL YEAR TO DATE
Chart 1.2: The first time a company enters external administration or has a controller appointed–Industry type, FINANCIAL YEAR TO DATE
Why Jirsch Sutherland
Since 1984, we have built our business on empathy and integrity – qualities that have led to us being recognised as one of Australia’s leading national insolvency players and trusted for over 30 years
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