The recent boom in personal insolvencies and bankruptcies has doubled law firm workflows in this area, according to Mallesons Stephen Jaques partner Tony Troiani.
 
Mallesons' Melbourne office has seen twice as much insolvency work for banks and individual directors. Troiani pointed to a range of work, including banks seeking to restructure or recover debt. "Most of the work I've seen includes helping clients comply with the Corporations Act and fulfil their obligation to appoint administrators if they are unable to pay off debt," he said.
 
The remarks come after the University of Melbourne's Centre for Corporate Law released figures that revealed that 27% of bankruptcies occurred among managers, administrators or other professionals - an increase of 142% from 1999 levels. It also found a 261% increase in personal insolvencies from 1990-2008 and a 12% jump since mid-2008 alone.
 
Although clients are facing challenges in restructuring or refinancing their debt, Troiani believes that more of them prefer to leave administration as a last resort. "They have been trying harder to refinance rather than going straight into receivership - this is a good thing," he said.

Troiani has recently acted on the Opus Prime liquidation (A$650m), Kleins Jewellery Group administration and Cornerstone Pubs receivership. He said that this kind of work is expected to keep Mallesons busy for at least 12 months, even if market conditions improve in 2010.

IMF Australia's managing director John Walker recently commented that many insolvency claims have not yet taken effect, because such claims can often take up to two years to "flow through" to litigation.