25/08/2026
ADMINISTRATION & LIQUIDATION: PLEASE READ AND UNDERSTAND THE RISKS
A large business getting into financial trouble doesn’t only affect its owners and lenders. It can create a domino effect through hundreds of small businesses, subcontractors, suppliers, employees and even consumers.
With entities within the Bathla Group reportedly having entered administration and having an Administrator appointed, it’s a timely reminder to look at the risks sitting inside your own customer base.
AFR reports show Bathla has around AU$3.2 billion in debt (yes with a B), and has many projects on the go around Norwest Sydney.
In a soft housing market have it’s asset values fallen? Will this impact their solvency and ability to trade out of administration? Bathla is NOT at the liquidation stage, but they are in administration, and secured creditors including the substantial ones, are going to be very nervous.
In general, customer risks are often overlooked. Do you consider:
- Are you too financially dependent on 1 or 2 major customers?
- Are you allowing late invoices to keep accumulating?
- Do you have tools, materials or unpaid supplies on sites that you could get locked out of?
- Could deposits or partially completed projects be lost?
- What happens if a major customer suddenly changes terms, stops engaging you or collapses, or you cut them as they are now too high a risk?
- Do you understand your position as an unsecured creditor?
- What about operational and reputational risks from unhappy or demanding customers on your business and people?
- Did you know that, in some circumstances, if a liquidator is appointed, they may seek to recover payments made before liquidation, including certain payments made within the previous six months? This one surprises a LOT of business owners.
The bigger issue is the flow-on effect. If one large company owes money to hundreds of smaller businesses, some of those businesses may then struggle to pay their suppliers, contractors and employees, causing them to collapse, creating a vicious cycle.
That’s why customer risk is not just about: “Are they paying me today?” It’s also about concentration risk, cash flow, payment behaviour, contracts, operational exposure, reputational risk, and what happens if things suddenly change.
Were you aware of these risks? Do you actively manage the risk your customers pose to your business? Would love to hear your thoughts, and please share this if it might help another business owner think about their exposures.
DISCLAIMER: We have no dealings with Bathla. Comments are based on publicly reported information, and we have no knowledge of where the administration process will ultimately lead.
Background image created on Midjourney, prompted by me - flaws deliberately left in, as when you build on flawed foundations, whether buildings or business, they can collapse!
PS: My first job after uni was Analyst, Operational Risk Control in financial markets. Risk is kind of ingrained in me! However, I take calculated risks which are essential in business.