Hamilton Locke partner Nick Edwards features in Lawyers Weekly, reflecting on the historical low rates of formal insolvencies despite the financial turbulence arising from the global pandemic and the potential landscape for insolvency and restructuring in 2022.
The article highlights the factors that may impact businesses in 2022 and the proactive approaches that businesses and advisors can undertake now to prepare.
“…insolvency is a critical cog in the machine that is Australia’s business ecosystem.
When done properly, he said, it provides for the redistribution of capital and resources from underperforming businesses to performing ones.
“As Frank Borman remarked in the early 80s … capitalism without insolvency is like Catholicism without hell. It is a necessary process and without it the system isn’t working.
“People mistakenly assume low numbers of insolvencies is a good thing – those low numbers, however, don’t represent good businesses who have dodged insolvency, but rather bad businesses stagnating and who in theory should be allowed to fail.”
Click here to read the full article.