Thousands of defunct businesses ‘simply handing back the keys’

About 50,000 business owners a year are simply handing back the keys and walking away, says the chief executive of insolvency body ARITA, due to a “dysfunctional” wind-up system. John Winter of the Australian Restructuring, Insolvency and Turnaround Association said the issue was starting to appear on government radar because the numbers involved were four to five times higher than formal insolvencies. “We think that there is a wholesale failure within the Australian insolvency regime,” Mr Winter said, speaking on the latest Accountants Daily podcast. “Over many years it's become far too complex.” “Typically, a business which is solvent and is being closed down should go through a members voluntary liquidation. If it’s insolvent, it's got to go through insolvency processes, but 40,000 to 50,000 businesses a year are not doing any of that.”