Mackay Goodwin chief Domenic Calabretta tops Insolvency Australia’s ranking liquidators

The latest ranking of Australia’s liquidators with the most appointments reveals a new wave of company collapses on the horizon. See the list.

Mackay Goodwin chief executive Domenic Calabretta secured 150 insolvency appointments last financial year. Picture: Supplied by Mackay Goodwin

The country’s leading insolvency experts are predicting more pain for vulnerable Australian businesses heading into the new year, but the latest figures reveal the rate of corporate failures is still well below pre-Covid figures.

Warnings of an upcoming surge in business insolvencies come as industry group Insolvency Australia releases its annual ranking of the country’s liquidators, which shows the rate of insolvencies is slowly rising following a two-year lull during the pandemic.

Australian Securities and Investments Commission (ASIC) statistics show that 6555 Australian businesses fell into administration or liquidation in the year to June, up 8 per cent on the 2020-21 figure but still well below the pre-pandemic average of 10,000-plus business failures.

Mackay Goodwin chief executive Domenic Calabretta, who topped Insolvency Australia’s ranking of close to 500 liquidators - based on the number of appointments in the year to June - said the ATO was still taking a “soft approach” to debt recovery.

Mr Calabretta, based in Sydney, racked up 150 insolvency appointments in 2021-22, but said his firm was down about 60 per cent on pre-Covid volumes of work.

“However, there has been an increase in the amount of warning letters and director penalty notices being issued to business owners,” he said.

“I expect there to be a new wave of insolvencies for the next financial year as industries are impacted by discretionary spending and higher energy prices being rolled out by the recent federal budget.”

Hamilton Murphy partner Stephen Dixon in Melbourne and Queensland’s Jarvis Archer from Revive Financial round out Insolvency Australia’s top three, with 106 and 89 appointments respectively.

With 21 appointments, FTI Consulting senior managing director Joanne Dunn was the highest ranked female liquidator on the male-dominated list.

Her appointments over the past year have included the $80m collapse of Privium Homes and the administration of Brisbane contractor Evolution Traffic Management, which was rescued via a deed of company arrangement.

Ms Dunne said female representation in the industry had improved over her 25-year career, but more needed to be done to attract women into the sector.

“It’s definitely something that needs to be addressed,” she said.

“It has moved, it is moving and it is getting better. We’re in this post-Covid world where work from home is a lot easier, especially for women who are working mothers.

“I’m hoping that will see more women stay in the industry and move onto their registrations to become professional insolvency practitioners.”

Revive Financial partner Jarvis Archer.

FTI Consulting senior managing director Joanne Dunn.

Insolvency Australia was established last year as an online marketplace to connect business owners and others needing insolvency and restructuring advice with close to 700 registered liquidators and bankruptcy trustees across the country.

Mr Gammon said its launch came at an important time for the industry as it looked to rebuild its workforce in anticipation of a rebound in insolvency activity next year.

“Over the previous couple of years there’s been very little activity in the insolvency space ... and a lot of firms have survived by reducing headcount, reducing hours and there hasn’t been as much recruitment into the industry, certainly at the graduate level,” he said.

“The sector is reasonably thin on the ground at the moment and firms will have to recruit, they will have to spend more money to retain staff - the industry will have to gear up again but there is a lot of stress and pressure out there.”

The industry expects the ATO to continue ramping up its debt collection activities next year as it looks to wind back its ballooning debt pile.

According to the Commissioner of Taxation’s annual report, released last week, the ATO’s undisputed tax debt increased from $26.5bn in June 2019 to $44.8bn in June 2022 as it paused enforcement actions during the pandemic.

In the report, commissioner Chris Jordan said addressing the debt increase was a priority.

“As the economy recovers, one of our key priorities is to address the collectable debt that has accrued over the past three years,” he said in the report.

McGrathNicol partner Jason Ireland. Picture: Adam Yip

Hall Chadwick partner Sule Arnautovic.

Mr Archer said businesses operating in the construction, retail and hospitality industries were among those most at risk of failure as the ATO came knocking and amid the global economic uncertainty.

Labour shortages and material price hikes have already resulted in the demise of major builders including Probuild, Condev, Privium and Lanskey Constructions which collapsed last month after racking up debts of $11m.

“The construction industry continues to represent one in four insolvencies, though it’s unclear if and when the predicted construction insolvency storm will occur,” Mr Archer said.

“There are still big construction failures each month, and anecdotally builders are asking for variations to fixed price contracts, which indicate the issues remain unresolved.

“That said supply chain costs appear to be reducing, and all the contracts signed up in late 2020 are progressively being finalised. If it’s going to occur, the Christmas shutdown period and expected difficult trading conditions of 2023 will likely be the final straw.”

Originally published as Mackay Goodwin chief Domenic Calabretta tops Insolvency Australia’s ranking liquidators