Insolvency Facts: Check Your Knowledge

What proportion of corporate insolvencies in Australia is made up of small businesses?

Small businesses, with a turnover of less than $1 million, make up around 80% of corporate insolvencies in Australia.

Do turnaround professionals believe early intervention could prevent most corporate insolvencies?

Yes, 65% of turnaround professionals believe that earlier intervention could prevent the majority of corporate insolvencies.

What are the main causes of insolvency according to the Australian Securities and Investments Commission (ASIC)?

The main causes of insolvency are inadequate cash flow (50%), poor strategic management (41%), and trade debtor losses (26%).

What is the average time taken from the appointment of an external administrator to liquidation in Australia?

The average time taken from the appointment of an external administrator to liquidation is around 1-2 years, depending on the complexity of the insolvency.

How much do unsecured creditors typically receive in the event of an insolvent company liquidation in Australia?

In Australia, unsecured creditors typically receive less than 10 cents on the dollar in insolvent company liquidations.

What percentage of companies that enter voluntary administration in Australia successfully avoid liquidation?

About 50% of companies that enter voluntary administration successfully avoid liquidation and return to solvency.