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The Australian Government introduced two significant new insolvency solutions following the enactment of the Corporations Amendment (Corporate Insolvency Reforms) Act
The number of firms in England and Wales going bust last month rose by 16% year-on-year, according to official figures.
Commentators said the 2,191 company insolvencies in July showed how many businesses were still recovering from the impact of high inflation and borrowing costs despite growing optimism about the UK’s economic outlook.
The figure was 7% down on June’s total, but insolvency levels remain much higher than those seen during both the COVID-19 pandemic and in the years following the 2008/09 financial crisis, officials said.
Rebecca Dacre, a partner at advisory firm Forvis Mazars, said the data was “a strong reminder that many businesses are still a long way off from recovery”.
Debt crackdowns by the ATO and big four banks have caused court wind-ups of businesses to surge by 133 per cent in the first half of FY2024, data from Insolvency Australia shows.
Its Corporate Insolvency Index found voluntary administration numbers were up 14 per cent and controller appointments jumped 34 per cent, bringing total appointments to 4,531, a 24 per cent increase over the same period in FY2023.
Director Gareth Gammon said large legacy debts from the COVID-19 era, combined with higher living costs, inflation and low discretionary spending created a “perfect storm of stressors” for business insolvencies.
“The resounding theme is the rate at which the ATO and big four banks are redoubling their debt…
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Corporate bankruptcies are increasing at double-digit rates in most advanced economies as borrowing costs rise and governments unwind pandemic-era measures to support business worth trillions of dollars.
Following a decade of decline the number of US corporate bankruptcies rose 30 per cent in the 12 months to September compared with the year-ago period, according to courts data.
Germany, the EU’s largest economy, said bankruptcies rose 25 per cent from January to September compared with the year-ago period. Since June, monthly “double-digit growth rates have been consistently observed compared to the previous year”,…
The Australian Government introduced two significant new insolvency solutions following the enactment of the Corporations Amendment (Corporate Insolvency Reforms) Act 2020 (Cth), as part of the federal government’s JobMaker Plan in response to the COVID-19 pandemic. The first of these solutions is the Simplified Liquidation Process (SLP) which allows eligible small companies to participate in a faster and more financially commercial liquidation process.
The benefits of the process, compared to traditional liquidation, include:
Reduced costs;
Shortened turnaround times; and
Increased returns/dividends to creditors (in theory).
The SLP does not replace the existing insolvency framework, but rather applies the existing…
“The results are astonishing but not surprising,” he said.
“The ATO [Australian Tax Office] has gone into overdrive to collect debts, particularly from small businesses – and directors are faced with the ongoing cost-of-living crisis, the spectre of higher interest rates due to stubbornly high inflation, and micro and macroeconomic and political headwinds.”
The problems behind the sharp lift in insolvencies are hitting the small and family business sector particularly hard.
The nation’s small business ombudsman Bruce Billson – a former minister in the Abbott and Howard governments – will on Thursday release a 14-point plan he believes will energise the sector.
Billson said without far-reaching changes that helped small…
EY-Parthenon teams were appointed as insolvency administrators in March 2021. From the start, a unique aspect to this engagement was the media attention. Given the size and impact of this bankruptcy, this was a hurdle both Abengoa and EY-Parthenon had to overcome and engage with regularly throughout the process.
Loan requests
Initially, the EY-Parthenon teams were asked to advise the bankruptcy of the parent company, with the ambition to find an alternative way ahead for the subsidiaries of Abengoa, where the majority of employees and debt were housed.
With support from EY teams, the subsidiaries requested help from the state-owned company SEPI, who are often used as a tool to implement government policy.
Corporate insolvency levels rose by 18.4 % in April 2024, with personal insolvencies also increasing by 9.9% during the same period, according to new statistics from the Insolvency Service.
Corporate insolvencies increased to a total of 2,177 compared to March’s total of 1,838, and increased by 18.4% compared to April 2023’s figure of 1,838.
Personal insolvencies also increased by 9.9% in April 2024 to a total of 9,651 compared to March’s total of 8,782, and increased by 4.7% compared to April 2023’s figure of 9,222.
Tim Cooper, President of R3, the UK’s insolvency and restructuring trade body, and Partner at Addleshaw Goddard LLP, commented on the publication of the April 2024…
2 min read Last Updated : Jul 16 2024 | 11:40 AM IST
The Adani Group is strategising to acquire the Jaypee Group’s cement assets, which boast over 9 million tonnes per annum (mtpa) capacity, according to a report by Moneycontrol. This potential acquisition comes as lenders initiated insolvency and bankruptcy proceedings against Jaiprakash Associates Ltd (JAL) in early June.
The Adani Group, currently ranks as India’s second-largest cement producer following its acquisition of ACC and Ambuja Cement. Led by Gautam Adani, the group has been actively growing its cement arm, with the goal of capturing one-fifth or 20 per cent of the Indian cement market by the financial year 2027-28.
Insolvency professionals warn the Tax Office is using DPNs and legal action to take a “far more aggressive” recovery stance.
The ATO is “hellbent” on chasing down $34 billion worth of debts owed by small businesses using director penalty notices (DPNs) and legal action, insolvency professionals say.
Insolvency Australia (IA) members said that recent activity showed the ATO was not only coming good on its promise to end its pandemic-era leniency, but that it was taking a “far more aggressive” approach.
“The ATO is hellbent on collecting what it’s owed and is really doubling down on compliance,” director Gareth Gammon said.
