find the latest legal job
Part Time Risk & Compliance Officer
Category: Other | Location: Brisbane QLD 4000
· Brisbane City · Flexible Part Time Hours
View details
Infrastructure Lawyer/SA
Category: Construction Law | Location: Sydney CBD, Inner West & Eastern Suburbs Sydney NSW
· Global elite law firm · Dedicated Infrastructure team
View details
Property Lawyer
Category: Property Law | Location: All Melbourne VIC
· 12 Month Contract · Diverse Work
View details
Family Lawyer
Category: Family Law | Location: Eastern Suburbs Melbourne VIC
· Boutique Firm · Great Reputation
View details
Infrastructure Lawyers
Category: Construction Law | Location: All Perth WA
· We'd be particularly interested to hear from you if you were a lawyer who knows your way around the infrastructure and energy sectors.
View details
More insolvencies on horizon: law firm

More insolvencies on horizon: law firm

Australia may have weathered the depth of the global financial crisis better than many, but a newly released global survey by law firm Norton Rose suggest the next year will see high levels of mid-sized insolvencies.

AUSTRALIA may have weathered the depth of the global financial crisis better than many, but a newly released global survey by law firm Norton Rose suggest the next year will see high levels of mid-sized insolvencies.

Retail and real estate, the survey suggests, are the most vulnerable sectors.

“I suspect that we have already seen most of the very large collapses, although I have little doubt that there are a couple more to come,” Steven Palmer, Norton Rose insolvency and restructuring partner, said.

“A lot of long term problems have been financed (or refinanced) on a short term basis. There is still significant pressure in a number of sectors including retail, aged care, property and infrastructure.”

Sixty per cent of respondents agree that the viability of many SME’s is at risk with retail and real estate sectors the most vulnerable.

Partner Peter Trevaskis, from the firm’s Sydney practice, said real estate is noted as one of the most vulnerable sectors and it was badly hit by the global financial crisis. But, he said, the situation is improving and the local REIT and development sector has moved to profit and revenue growth mode.

“There are now clear development and investment opportunities, a point not lost to Asian-based investors who have become very active.”

Trevaskis said an upturn is being driven by healthier balance sheets of financial crisis survivors, as well as the disappearance of aggressive structuring of funds, “which pushed yields to unsustainable lows”.

Also impacting the upturn are broader domestic economic factors such as high employment, historically low interest rates and pent up demand, he said.

But Palmer notes that insolvencies should still be expected in the next 12 months. "There is continued upward pressure on interest rates, and while the new found strength of the Australian dollar may deliver a windfall to some, it will be catastrophic for others, particularly if they have not hedged adequately".

Respondents also believe the global financial recovery will be long and shallow and liquidity will not return to pre-crisis levels in the banking system until at least 2012.

Australian respondents view their own economic growth as stable, however their expectations for global recovery are less optimistic. Thirty six per cent of Australian respondents believe recovery in the global economy will be double-dip, the survey revealed.

Liquidity was viewed as the greatest risk to business prospects, a stark change in sentiment from six months earlier.

In January this year, more than 50 per cent of respondents indicated they were seeing a return to liquidity. Six months later and the mood has mellowed, with 80 per cent of Australian respondents, and 75 per cent globally, believing it will be at least 18 months before liquidity returns to pre-crisis levels.

Respondents were however optimistic about investment opportunities in Australia. Outside of Asia (including China) Australia was noted as the best prospect for business.

Dan Marjanovic, head of financial institutions at Norton Rose Australia said; “While China, India and the Asia Pacific region continue to be the principal drivers for economic growth, the direction of the nascent global recovery will depend on how remaining structural issues, such as the levels of sovereign debt in Europe and the US, are addressed.”

"An interesting outcome reflected in the survey was the diminished global appetite for regulatory reform and is in line with recent G20 discussions and commentary on the effects of Basel III,” said Marjanovic.

“I suspect that it also reflects and a greater awareness of the challenges to achieving “one-size-fits all” global regulatory reforms and that risk mitigation is not entirely a function of regulation but also requires prudent and effective supervision by regulators", he said.

The report, Global Financial Recovery: A Matter of Perspective, sixth in a series, details the views of 314 respondents from a range of financial institutions, including banking, insurance and funds, located in Asia Pacific, Europe and the Middle East, who were surveyed between 13 July and 17 September 2010.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

More insolvencies on horizon: law firm
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Nov 17 2017
It's time for politicians to commit to eradicating domestic violence
The national shame of domestic violence cannot be left unaddressed, writes Christine Smyth. ...
Nov 16 2017
From lawyer in law firm to senior governance professional
Promoted by Governance Institute of Australia As a law graduate, Kate Griffiths never imagined...
marriage equality
Nov 16 2017
Legislation the next hurdle for marriage equality
Lawyers have underscored the importance of ensuring same-sex marriage legislation does not limit ant...
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...