Risk Watch Essentials – February 2021.
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New Debtor in Possession and Insolvency Laws
From 1 January 2021, the Government introduced some core structural changes to the reconstruction and insolvency regime which include the following:
- A Debtor in Possession restructuring process for small businesses, whereby a company can avoid liquidation and appoint a Restructuring Practitioner, for further information please follow the link below:
www.rodgersreidy.com.au/small-business-restructuring-sbr - A simplified liquidation process, for further information please follow the link below:
www.rodgersreidy.com.au/simple-creditors-voluntary-liquidations - Declaration of Eligibility for Temporary Restructuring Relief (“DETRR”) – if a company lodges a DETRR before 31 March 2021 it can provide up to four (4) months of additional relief from insolvent trading laws for companies seeking to appoint a Restructuring Practitioner, for further information please follow the link below:
https://asic.gov.au/regulatory-resources/insolvency/insolvency-for-directors/temporary-restructuring-relief
During the month of February, only eighteen (18) companies across Australia lodged a Declaration of Eligibility for Temporary Restructuring Relief and only three (3) companies appointed a Restructuring Practitioner.
Risk Watch Essentials – February 2021
The tables below summarises the data essentials captured from our daily Risk Watch publication, which provides a synopsis of the insolvency market for February 2021.
No. of Registered Liquidators in Australia as at February 2021
| Registered Liquidators | Australia | NSW | VIC | QLD | WA | ACT | SA | NT | TAS |
| TOTAL | 655 | 256 (38%) | 160 (25%) | 109 (16%) | 64 (10%) | 10 (2%) | 46 (7%) | 2 (<1%) | 8 (1%) |
Winding Up applications filed with the Court in February 2021
| Winding Up applications | Australia | NSW | VIC | QLD | WA | ACT | SA | NT | TAS |
| TOTAL | 32 | 12 (38%) | 14 (44%) | 2 (6%) | 1 (3%) | 0 (0%) | 3 (9%) | 0 (0%) | 0 (0%) |
Analysis:
A total of 32 Winding Up applications were filed throughout Australia in February 2021, the majority of which were in Victoria (14 or 44%), New South Wales (12 or 38%), South Australia had (3 or 9%) and Queensland (2 or 6%). There were no winding up applications filed in the Australian Capital Territory, Northern Territory or Tasmania during February 2021.
Formal Appointments in February 2021
| Formal Appointments | Australia | NSW | VIC | QLD | WA | ACT | SA | NT | TAS |
| TOTAL | 422 | 170 (40%) | 133 (32%) | 62 (15%) | 21 (5%) | 11 (3%) | 17 (4%) | 0 (0%) | 8 (2%) |
| Creditors’/Members’ Voluntary Liquidation | 290 | 134 (46%) | 65 (22%) | 51 (18%) | 15 (5%) | 9 (3%) | 11 (4%) | 0 (0%) | 5 (2%) |
| Court Liquidation | 45 | 15 (33%) | 13 (29%) | 6 (13%) | 3 (7%) | 2 (4%) | 6 (13%) | 0 (0%) | 0 (0%) |
| Voluntary Administration | 87 | 21 (24%) | 55 (63%) | 5 (6%) | 3 (3%) | 0 (0%) | 0 (0%) | 0 (0%) | 3 (3%) |
Analysis:
There were a total of 422 formal appointments throughout Australia in February 2021, the majority of which were in New South Wales (170 or 40%), Victoria (133 or 32%) and Queensland (62 or 15%).
Formal Appointments in February 2021
| Formal Appointments | Australia | NSW | VIC | QLD | WA | ACT | SA | NT | TAS |
| TOTAL | 422 | 170 (40%) | 133 (32%) | 62 (15%) | 21 (5%) | 11 (3%) | 17 (4%) | 0 (0%) | 8 (2%) |
| Creditors’/Members’ Voluntary Liquidation | 290 | 134 (46%) | 65 (22%) | 51 (18%) | 15 (5%) | 9 (3%) | 11 (4%) | 0 (0%) | 5 (2%) |
| Court Liquidation | 45 | 15 (33%) | 13 (29%) | 6 (13%) | 3 (7%) | 2 (4%) | 6 (13%) | 0 (0%) | 0 (0%) |
| Voluntary Administration | 87 | 21 (24%) | 55 (63%) | 5 (6%) | 3 (3%) | 0 (0%) | 0 (0%) | 0 (0%) | 3 (3%) |
Analysis:
There were a total of 422 formal appointments throughout Australia in February 2021, the majority of which were in New South Wales (170 or 40%), Victoria (133 or 32%) and Queensland (62 or 15%).
