10 May 2009

Company insolvency cases increase

10:37 am on 10 May 2009

The number of companies going into insolvency has skyrocketed, bringing the plight of creditors into focus.

In the first two months of this calendar year, the Official Assignee was appointed the liquidator of 66 companies, compared to 189 in the whole of the 2007/08 financial year.

The Australian and New Zealand governments are considering changing the way company insolvencies are managed, when a firm is set up in both countries.

At the moment, insolvency administrators are appointed in both countries and it is difficult for a New Zealand creditor to lay a claim under the insolvent company's Australian assets.

Senior associate and insolvency expert at Kensington Swan, Tyrone Cooley, says changes proposed would see an insolvency in Australia automatically recognised in New Zealand.

This should reduce costs, speed up proceedings and result in more money being available to distribute to creditors, Mr Cooley says.