The graph below represents formal appointments from the start of 2017 to March 2022 on a quarterly basis. The graph indicates that the number of formal appointments continues to be well below pre-pandemic levels however the trajectory for voluntary liquidations since January 2022 suggests that company directors may be starting to take action to wind up insolvent entities following the end of formal direct government support payments such as job keeper, job saver and government grants.
Meanwhile, the ATO has issued around 50,000 warning letters to businesses regarding director penalty amounts. We can expect to see that this will translate into more voluntary winding ups by directors and the recommencement of formal court winding-up applications by the ATO in the not too distant future. Readers will understand that the ATO has refrained from winding up applications since the beginning of the pandemic in Australia. Obviously, this cannot go much longer and the ATO must return to more traditional procedures to recover outstanding tax debt. Expect to see insolvency appointments continue to rise.
Rodgers Reidy is the leading appointee for appointments under the recently legislated Small Business Restructuring Proposal (“SBRP”). We have achieved excellent results and saved most of the companies to which we have been appointed from a formal liquidation or administration. We urge directors to consider this option and act early. Feel free to contact a director from your local Rodgers Reidy office to discuss whether this option is right for you.
The tables and graphs below summarise the data essentials captured from our daily Risk Watch publication, which provides a synopsis of the insolvency market for April 2022.
In addition to the tables below, five (5) companies appointed a Restructuring Practitioner during the month of April 2022 in relation to the Debtor in Possession restructuring process for small businesses.
Winding Up applications filed with the Court in April 2022
|Winding Up applications
There was no winding up applications filed by the ATO in April 2022.
Formal Appointments in April 2022
|Creditors’/Members Voluntary Liquidation
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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