Maybe ASIC’s career bureaucrats should get out of the office and talk to a few insolvency specialists who are actually at the coalface. They say the figure is even less than what the ASIC report found. Stirling Horne, a partner at melbourne accountancy Lawler Draper Dillon, says: “For a company to go into voluntary administration and trade out of its difficulties is probably five out of 100,’’ Horne says.
“I would have thought that in 50% of those, some nucleus of the business is sold on. Certainly the company itself may go into liquidation but the business itself will continue in some form or another.
“What happens is you have a look at these companies and you make up your mind whether they can be saved or trade out of their difficulties. The difficulty with a lot of smaller companies is that the cost of doing a trade out because the administrator needs to have control of it and incurs a lot of ongoing expenses.
“On top of that, the customers often get wary of dealing with a company that’s in administration and so there are a number of factors that work against it.
“I have been involved in some that have traded on and paid 100 cents in the dollar and lived another life but there wouldn’t be many…
