THE expansion of one of Sydney’s biggest insolvency law firms into Brisbane comes as a judicious warning for Queensland business owners that tough economic conditions are far from over.
Henry Davis York will consolidate its new Brisbane headquarters this month after identifying a likely rise in insolvency opportunities.
Managing partner John Evans (pictured), lead legal adviser in the ongoing ABC Learning Care Group saga, warns increased insolvency demand spreads much further than high-profile corporate collapses.
He highlights the broader SME community and the retail and tourism sectors are the most at risk for financial turmoil over the next year.
“There are a couple of things that insolvency lawyers expected would happen that haven’t happened yet,” says Evans.
“The first is a rise in general SME insolvency work, but over the last few years the SME market has been far more resilient than expected. Post-GFC however there are several things happening that appear to be impacting the sector.
“Interest rate rises are creating adversity and the ATO is now taking a harder stance on recovering any overdue tax.
“The other major forecast is that the impact of reduced consumer spending on the wider retail sector will become more significant. The added impacts of recent natural disasters will prove a double whammy for both retail and the tourism industry in Queensland.
“It’s all crystal ball gazing, but both of those sectors are going to face some serious challenges this year.”
Evans’ observations serve as a forewarning for SMEs to vigorously manage cash-flow and restructure financial systems during the recovery period.
With many large banks holding ‘fairly large investments’ in Queensland’s rural assets, Evans says there are also concerns for the local agriculture sector.
Henry Davis York is expected to move into its five-year lease in Queen Street’s ANZ Building in May on completion of a full fit-out. The office will initially house around 10 lawyers but a recruitment drive is underway.
The firm is also handling the continued liquidation of failed fund management firm Octaviar Limited (formerly MFS).
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