Australian Insolvency - December 2020

The tables in the following link summarise data essentials captured from Rodgers Reidy's daily Risk Watch publication, which provides a synopsis of the insolvency market for December 2020 including:

No. of Registered Liquidators in Australia as at December 2020
Winding Up applications filed with the Court in December 2020
Formal Appointments in November 2020
Click here to read Risk Watch Essentials

Covid Analysis

The tables and graphs (found here) show that the Covid stimulus measures introduced have had a drastic effect on the number of insolvency and winding up procedures.

For the month of October to December 2020 compared to October to December 2019, the data indicates a significant reduction in the number of reported events in particular Winding Up Applications and Court Liquidations.

1. 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;
2. Court Liquidations are down 90% for the quarter.
3. 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%.
4. 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.