Insolvent Trading

Factors For Creditor To Consider To Become Aware That Company Is Insolvent

  • outstanding taxes & other unpaid statutory obligations
  • installment arrangements with the ATO
  • difficulties of company paying suppliers and third-parties
  • payments to other suppliers outside of normal terms
  • Suppliers placing company on stop supply
  • Suppliers insisting on COD, or request for immediate part payment of debt before resuming supply.
  • Circumstances involving bounced, dishonored and post-dated cheques.
  • Knowledge of any other creditors threatening legal action against the company for late or non-payment
  • legal documents served on company informing them of the insolvency
  • difficulty in collecting enough money to pay the wages. Were the salaries continued to be paid out?
  • public information indicating any trouble with the collection of enough money to pay weekly wages, proof of any report s that assessed the company as continuously losing money
  • available information of any bank refusing the company or unwilling to extend further credit.
  • report of any maxed out overdraft and credit cards
  • any indication that there was a poor relationship between the company and the present Bank, including the inability to borrow further funds.
  • any information available that the company had no access to alternative finance.
  • knowledge of any existing special arrangements with selected creditors (to show preference)
  • any payments made of rounded sums, which are not reconcilable to specific invoices.
  • any solicitors’ letters, summons(es), judgments or warrants that were issued and made public against the company.
  • investigation of the ability of the company to produce timely and accurate financial information to display the company’s trading performance