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What is a Statutory Demand and When is it Used for Debt Collection? A Statutory Demand serves as a formal court notice compelling a debtor company to settle an outstanding debt owed to a creditor, marking the initial step in the legal process of initiating the "winding up" of an insolvent company in accordance with Section 289 of the Companies Act 1993. Essentially, a Statutory Demand functions as a litmus test for a Debtor Company, evaluating its financial viability by determining its ability to meet its obligations and settle debts promptly. It should however only be used as a debt collection tool if there is no dispute. A disputed debt has a different process to follow. A statutory demand should…
In our 38th Insolvency by the Numbers, we look at our data set for the year end 2023 in review along with January 2024. We look at how the year has tracked compared to prior years and what to we can expect in 2024, followed by a look at how January 2024 has compared to the last few years. The latest data release shows that inflation has fallen however the portion of it generated by non-tradeable inflation figures remains high. Economists are predicting that it is unlikely that we will see an official cash rate drop till the later part of the year with come commentators still expecting the first drop in 2025. The property market however has now stabilised…
In our 37th Insolvency by the Numbers, we look at our data set for November 2023 and past years to see how the month has tracked and what may be coming up in the coming months. We now have a coalition sorted giving people an idea of what is in store for the next 3 years, the Reserve Bank has kept the OCR stable and has said that rates will not be coming down till 2025 as expected. With Christmas fast approaching businesses are rushing around trying to complete work for customers before the year end when the customer has had all year to get it sorted but left it to the last minute, so business as normal for this…
Insolvency by the Numbers: NZ Insolvency Statistics October 2023 In our 36th Insolvency by the Numbers, we look at our data set for October 2023 and past years to see how the month has tracked and what may be coming up in the coming months. With October and the election finally at an end, except for specials, we have an indication of what party will be front footing it into the next 3 years. The consensus that came out over the election campaign however was that getting back on the good footing may take some time, with cuts in government spending appearing to be an interesting topic. Whether this happens only time will tell, but hopefully we will see a…
In our 35th Insolvency by the Numbers, we look at our data set for September 2023 and past years to see how the month has tracked and what may be coming up in the coming months. With September coming to an end, we are in the last two weeks of NZ’s latest election campaign. As predicted it has been a month of promises and debates from all parties. Unsurprisingly like with a lot of our past elections there is a level of uncertainty across all markets from housing, the economy and the stock market. The September OCR announcement once again saw no change to the rate, however heavy emphasis was given to the idea that we may be in line…
In our 34th Insolvency by the Numbers, we look at our data set for August 2023 and past years to see how the month has tracked and what may be coming up in the coming months. During August we begun to see the political parties get there electioneering into gear and ramp up their campaigns with policy being released left right and centre and billboards going up across the country in every available location. The latest OCR announcement saw no change to the rate, it did push out the timeline when we may begin to see any future reductions in the rate. In the insolvency space there was positive news for the Ruapehu ski fields, the construction sector continues to…
Company Insolvencies – Liquidations, Receiverships, and Voluntary Administrations Company insolvency appointments for July 2023 combined across all insolvency types have come in just under 2019 levels. Court liquidations remain a driver for these increased levels. This increase is following continued strong winding up applications driven by the IRD and its recovery efforts. As a percentage share of appointments, the figures have remained consistent from last month. Total corporate insolvency figures for the year to date continued to sit just behind 2019 figures. The slower start to the years insolvency appointments has yet to be recovered from. While court liquidations have dropped slightly as an overall percentage they still remain above their long team average so remain a large portion of…
In corporate insolvency, two common terms often arise: liquidation and receivership. For businesses facing financial distress in New Zealand, it is helpful to understand the distinctions between these two processes. To gain an understanding we explore the disparities between liquidation and receivership, shedding light on their respective implications and outcomes. Liquidation: The Dissolution of a Company Liquidation, also commonly referred to as winding up, is a formal process that leads to the dissolution of a company. It is typically employed when a company is no longer able to pay its debts and is deemed insolvent. It is also used by solvent companies that have made capital gains and seek to distribute the capital gain tax free on liquidation. The objective…
Company Insolvencies – Liquidations, Receiverships, and Voluntary Administrations Company insolvency appointments for June 2023 combined across all insolvency types have beaten out all past years shown in the above graph back to 2019. Court liquidations have been a driver for these increased levels showing the highest figures since prior to 2020 with 59 appointments. This increase is following a number of months or stronger than usual winding up applications lead in part by IRD and its recent drive to collect delinquent debtors. Whether this level of court appointments will continue into the election only time will tell what IRD does, or if shareholder appointments will continue to grow due to an ongoing cost of living crisis and general price increases.…
Economic recap April saw the latest inflation figures released for the year to March 2023 showing a drop from the highs seen in the last two periods. The bulk of this drop in inflation however was from international factors while domestic figures remained elevated. Because of this and a number of other reasons the Reserve Bank has continued on their track whacking on a further 50 basis point rise to the OCR. We expect to see a final 25 basis points at the next meeting. Comparatively Australia has seen their OCR drop, it is expected we will not see this for some time in NZ. The percentage of mortgage lending that remains at fixed rates is considerably higher in NZ,…
Economic recap Figures released in March saw the New Zealand economy gross domestic product (GDP) fall 0.6% in the last three months of 2022, after a 1.7% rise in the September 2022 quarter. The drop at the close of the year was larger than predicted by many of New Zealand banks and a number of economists. Annually, GDP is up 2.4% year on year, unemployment remains low, at 3.3%. Two large banks in the United States with significant exposure to the technology sector failed, while another entered liquidation under financial distress. These banks were Silvergate Bank, Silicon Valley Bank, and Signature Bank. Outside the United States, Credit Suisse joined the above 3 banks finding themselves in difficulty, the difference here…
Economic recap February saw another lift in the Official Cash Rate by 50 basis points, with a further 75 basis points expected to be added this year. The language from the reserve bank indicated that they had not seen the expected signs in inflation pull back and were continuing on their chosen path from 2022 to get inflation under control as quickly as possible. The extreme weather events experienced in January continued into February with considerable damage to parts of the North Island. While the immediate effects have been considerable in certain areas the long term effects and costs will have wide reaching repercussions as additional spend will be necessary and likely increase demand on limited supplies and pressure on…
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