ASIC have just released their report on insolvency statistics for external administrations for the period 1 July 2013 – 30 June 2014. The statistics are based on lodgement of statutory reports by Liquidators, Receivers and Voluntary Administrators.
A snapshot of the key findings are as follows:
- Industries with the most reports lodged were: Other business and personal services 26%, Construction 23%, Accommodation and Food Services 10%. Interesting to note that retail trade did not register in the top three industries in 2014, in comparison to 2013 (10%) and 2012 (10%).
- The top 3 nominated reason for failure were: Inadequate cash flow or high cash use 43%, Poor strategic management of business 42% of reports, Trading losses 33%. This is consistent with reports in 2013 and 2012.
- The top 3 alleged possible misconduct by directors were: s588G(1)–(2) Insolvent trading 57%, s286 and 344(1) Obligation to keep financial records 37%, s180 Care and diligence—Directors’ and officers’ duties 27%.