109 Qld businesses bust during COVID-19 crisis but ‘the worst is yet to come’

More than 100 Queensland businesses have been pushed into liquidation or administration as a result of the bushfire disaster and COVID-19, but there are warnings the worst is yet to come.

AN ECONOMIC crisis created by coronavirus is unlike anything the world has ever seen, with more than 100 Queensland businesses already pushed into liquidation or administration during the pandemic and the worst yet to come, a leading Brisbane liquidator says.

Bushfires and the coronavirus are tipped to push Australia into recession for the first time in 29 years later this year, putting thousands of businesses and tens of thousands of jobs at risk even as social distancing restrictions are lifted.

Virgin Australia has been the face of the economic crisis, but behind that high-profile collapse into administration are dozens more Queensland companies who have been pushed to the brink.

Some experts say an “insolvency avalanche” will follow when government financial support lifts.

Worrells’ Brisbane Partner Morgan Lane, who has been helping restructure businesses for more than 30 years, said the pandemic was “uncharted waters” across the world.

“This is a health matter that is affecting business,” he said.

“We had the Global Financial Crisis and other world events but they weren’t driven by people having to be indoors.

“We are experiencing I believe the greatest commercial deterioration that I have ever seen because of the sudden shutdown of the economy.”

Worrells is encouraging Queensland businesses to urgently assess their operations and reduce costs where possible.

“This could be a reduction in staffing hours, termination of unnecessary or non-essential services or even sale of surplus assets,” Mr Lane said.

Deferring expenses or asking creditors to provide support through relaxed payment terms are other options.

The Australian Taxation Office can also provide relief by deferring pay as you go payments, income tax, fringe benefits tax assessments and excise tax by up to four months.

Mr Lane said it was likely only the fittest businesses would survive.

“I think that is quite true,” he said.

Companies have grabbed six-month loan deferrals from their banks and signed up for the government’s $130 billion Jobkeeper scheme to keep staff on the books.

Since the pandemic started in Australia on March 2 more than 100 Queensland businesses have been placed into liquidation or administration.

One of the first tourism casualties

An adventure company offering tours to the most spectacular parts of Queensland collapsed due to the coronavirus, leaving more than 1000 travellers out of pocket up to $2.5 million.

Brisbane’s MTG Group, trading as Adventure Free Tours, fell into liquidation on March 11 after a series of external events limited cashflow.

It is understood coronavirus was the final straw for the tourism company, which had been battered by cyclones and bushfires earlier in the season.

Liquidator Chris Baskerville of Jirsch Sutherland said the travel agency owed money to customers and clients.

“We estimate over 1000 creditors including customers who placed forward bookings and suppliers to the company, including tour providers,” he said.

“We estimate total debts of between $1.5 million and $2.5 million.”

Controversial canopy operator busts

A QUEENSLAND tour operator under investigation over the death of a South Australian tourist in the Daintree Rainforest last year has closed its doors owing more than half-a-million dollars to creditors.

Jungle Surfing Canopy Tours collapsed into liquidation in March, with the coronavirus pandemic spelling the end for the Far Northern tourism business.

Workplace Health and Safety investigators have been examining the death of Dean Sanderson, who fell to his death from Jungle Surfing’s zip line on October 22.

The Adelaide father-of-three fell 16m from the recreational cable into rainforest alongside wife Shannon, 48, who survived with spinal and shoulder injuries.

It can now be revealed the company owes $646,046 to creditors, including its workers.

A financial report on the activities of Keydane Pty Ltd, trading as Jungle Surfing Canopy Tours, reveals workers are owed $85,079 in superannuation.

At $220,000, Walsh Family Trust is listed as the zip line company’s largest creditor, while the Australian Taxation Office is owed $195,000.

Jungle Surfing Canopy Tours also owes $71,353 to O’Reilly Stevens Lawyers and $85,028 to Volkswagen Finance for a Ford Raptor pick-up truck.