The construction industry has a poor track record of insolvencies. There are various reasons for this and the commonly talked about one is biased risk allocation, which is pushing risk downward in the value chain along with poor payment practices. When compared to other industries, construction also has a higher capital requirement due to investments in plant and equipment.
Insolvency is a topic we avoid talking about, but the challenge is real. With COVID-19 and with some specialised construction projects such as NBN coming to an end, the threat is real for businesses. And while challenges faced by larger organisations make headlines in mainstream media, the realities and stresses of small to medium-sized contractors only remain front of mind for the owners, unknown to many of us.
In this episode, I am with Andrew Spring, a Partner in the National Insolvency Firm, Jirsch Sutherland. Andrew’s career in the specialist recovery and insolvency practise commenced in 1999. Having worked internationally for a number of years, Andrew joined Jirsch Sutherland as a partner in 2011 and with his experience and expertise helped many local businesses, including many in the construction industry ride through difficult and challenging periods.
We discuss Australia's insolvency regime, duties of directors, dive deep into the voluntary administration process and discuss recent changes to illegal phoenix activities. We made sure jargons and legal terms are minimised.
The Competitive Contractor Podcast is brought to you by Shivendra & Co (www.shivendra.com).