‘Tsunami’ of bankruptcies, business collapses to smash Qld

 

 

A TSUNAMI of business collapses and bankruptcies are expected to smash Queensland within months as companies defer major debts until the COVID-19 crisis passes.

Liquidators are reporting a sharp downturn in work, with many "sitting on their hands" thanks to changes to Australia's insolvency laws amid the virus.

Struggling business owners can defer some Australian Taxation Office and creditor debts during the COVID-19 pandemic in a move some experts say will create a delayed 'tsunami' of liquidations.

Jirsch Sutherland Partner Malcolm Howell said the "greatest danger period" would be within the next 12-18 months.

"Once the government relief measures expire, many SMEs that have deferred their liabilities are likely to receive a severe capital hit six or more months down the track and might not be able to meet their obligations," he said.

"Given a lot of small-business owners often use personal finances for business borrowings - including using their homes as a guarantee - they are more vulnerable."

The high-profile administration of Virgin Australia, the largest since Ansett, has dominated headlines but across the state other small and medium-sized businesses have also gone under.
The high-profile administration of Virgin Australia, the largest since Ansett, has dominated headlines but across the state other small and medium-sized businesses have also gone under.

 

Queensland recorded 126 business insolvencies in the March quarter, down from 157 at the same time last year, new statistics reveal.

The high-profile administration of Virgin Australia, the largest since Ansett, has dominated headlines but across the state other small and medium-sized businesses have also gone under.

Restaurants have taken a hit, with Zambrero stores at Garden City and Chevron on the Gold Coast put under administration since the COVID-19 pandemic started.

The high-profile administration of Virgin Australia, the largest since Ansett, has dominated headlines but across the state other small and medium-sized businesses have also gone under.

Despite the administrations, many liquidators say work has dried up.

Morton's Solvency Accountants owner Gavin Morton said the decrease could be attributed to changes the Federal Government has made to make it more difficult for companies to be forced into liquidation.

Liquidator Jarvis Archer from Revive Financial said many insolvency experts were "sitting on their hands" with little to do amid the coronavirus.

Here are a few companies which have gone bust.

 

 

The empire has fallen

 

AN EMPIRE of property and wealth companies owned by Brisbane CEO Martin Graham continues to crumble, with another of his businesses collapsing into liquidation.

Vystal Pty Ltd, a property investment and wealth business owned by Mr Graham was ordered into liquidation by the Supreme Court on March 19.

Mr Graham made headlines in January when The Courier-Mail revealed his company MJM Projects, trading as Vystal Construction and Development, collapsed owing creditors $4.1 million.

A court application was lodged several weeks before MJM Projects' collapse by Sasha Legal on behalf of Print Management Facilities Australia to wind up another of Mr Graham's companies, Vystal Pty Ltd.

Mr Graham was listed as the sole director of Vystal, a property investment company.

It is understood Kaily Chua and David Hambleton of insolvency specialists Rogers Reidy, who were appointed liquidators to the business, are studying its financial affairs.

Vystal Property Group founder and chief executive Martin Graham.
Vystal Property Group founder and chief executive Martin Graham.

 

The 190 creditors of MJM Projects owed $4.1 million are unlikely to receive a cent, with liquidator Steven Staatz tipping a $4.2m deficiency once his costs are covered.

Mr Graham has been uncontactable since the collapse, but he remains the director of 12 companies, all which are registered to a home in Kingscliff, online records show.

The director's address is listed as a spacious four-bedroom, three-bathroom home is just one block from the beach in the sought-after New South Wales town.

In 2017 Mr Graham said he had learnt many lessons on the tumultuous journey during his 15 years as CEO of Vystal Property Group.

 

 

Company ends after 23 years

 

FAMILY-OWNED Brisbane electrical company Teldaco was put into liquidation last month after director Bradley Surman got tired of funnelling money into the business.

Mr Surman, who previously sold his own home to keep the company going, put the business into liquidation on April 14 with $1.15 million owing to unsecured creditors, $43,095 to secured creditors and $35,356 to employees.

Established in 1997, Teldaco was a Bowen Hills-based company specialising in the design, installation and maintenance of a wide range of telecommunications, electrical, data and security requirements.

Morton's Solvency Accountants owner Gavin Morton took control of the company after it was put into liquidation and said the matter was almost finalised.

He said secured creditors and employees had been paid their entitlements, but it was too early to determine the return for unsecured creditors.

Mr Morton said the director had tried his best to keep the company going to no avail.

"The director was sick of putting money into it," he said.

"It's not a COVID-19 thing."

Originally published as 'Tsunami' of bankruptcies, business collapses to smash Qld within months



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