WHAT'S AHEAD: TRENDS FOR 2026

As we look toward 2026, several trends are likely to shape the insolvency landscape

Continued High Liquidation Numbers

With IRD's substantial debt book and continued enforcement focus, liquidation numbers are expected to remain elevated through at least the first half of 2026. The backlog of businesses struggling with accumulated COVID-era debt has not yet fully worked through the system.

Rise in Personal Insolvencies

Corporate insolvencies typically lead personal insolvencies by 6-12 months. As companies fail, directors with personal guarantees and shareholders who have extracted value face increased risk. Personal receivership appointments have already risen significantly, and formal personal insolvencies (bankruptcy, No Asset Procedures, and Debt Repayment Orders) are expected to follow.

Increased Director Liability Claims

The combination of high insolvency numbers and the Law Commission's review of directors' duties will likely result in increased scrutiny of director conduct. Liquidators are pursuing more voidable transaction claims and reckless trading allegations as they seek to maximize recoveries for creditors.

Private Credit Growth

While private credit plays a significant role in European and American restructuring markets, it remains relatively underdeveloped in New Zealand. The growth of private and alternative capital in Asia and Australia is expected to provide New Zealand businesses with more restructuring options, particularly for mid-market companies that may not fit traditional bank lending criteria.

Cyber-Driven Insolvencies

Major cyber incidents can have devastating impacts on business viability, as demonstrated by global events like the CrowdStrike outage in July 2024. The intersection of cyber-security failures and insolvency law is likely to generate novel legal issues around director duties, insurance coverage, and creditor priorities.