Government Agencies Abandoning Company Wind-ups Could Cause Insolvency Tsunami

Prushka Fast Debt Recovery revealed through data sourced from court records that the Australian Taxation Office and other government agencies, typically the largest source of company liquidations, have halted their winding up of businesses, Dynamic Business reported. In April to June, 374 businesses issued Notices of Winding Up Applications, a decrease of 47 per cent compared to the last quarter, and 64 per cent year-on-year. Roger Mendelson, CEO of Prushka, warned while the government’s initiatives to support businesses through the COVID-19 pandemic were helping keep companies afloat, it will cause a backlog of wind-up and bankruptcy cases. “From April, the government issued several temporary changes to support financially distressed businesses, including extending the time companies have to respond to a statutory demand from 21 days to six months. This has caused an incredible slowdown in the debt collection process,” Mr Mendelson said. Read more