UNIT declared insolvent

After noticing that UNIT’s Facebook and Instagram pages disappeared off the face of cyberspace this morning, we suspected something more complex than IT issues may be at play.

It turns out that, as of close of business yesterday, the prominent Australian clothing manufacturer will undergo voluntary administration due to unavoidable financial strains. UNIT has been declared insolvent – or unable to meet its obligations to its creditors – and receivers have taken control of the company.

Making light of a bad situation, a spokesperson from UNIT pointed out that this development may be a blessing in disguise. If the company is purchased by a bigger player who has access to vast amounts of cheap capital, it could offer the opportunity for UNIT to move ahead and turn a new chapter in the company’s evolution.

Unfortunately, in the meantime, the future of the brand is uncertain.

What’s the terminology mean?

According to the Australian Securities and Investment Commission (ASIC):

Receiver: An external administrator appointed by a secured creditor to realise enough of the assets subject to the charge to repay the secured debt. Less commonly, a receiver may also be appointed by a court to protect the company’s assets or to carry out specific tasks.

Receivership: An insolvency procedure where a receiver, or receiver and manager, is appointed over some or all of the company’s assets.