Monday, 10 May 2021

There are few ‘zombies’ after the end of JobKeeper because firms have horded cash and restructured debt. The challenge now is seizing opportunities on the other side of hibernation.

Dire predictions about a COVID-19 insolvency “cliff” have failed to come true. Thousands of businesses decimated by the pandemic would never reopen, the doomsayers warned.

Zombie companies would disintegrate when JobKeeper and other federal government stimulus ceased. There would not be enough insolvency practitioners to deal with the avalanche of failed businesses.

Guess what? It didn’t happen. There is no cliff. There will be no deluge of insolvencies. Yes, there will be an increase from 2020 – which was abnormally low due to government intervention and external administrations were down 54 per cent from 2019 – but it will not be in mass proportions.

Read Scott Langdon's opinion piece in the Australian Financial Review here.

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