Dousing the phoenix: Three measures that could curb this dodgy insolvency practice
By Dr Drew Donnelly, Compliance Quarter. We mentioned last time that the Government is consulting on some options for curbing the misuse of the ‘safety net’ available for companies unable to pay employment entitlements on insolvency. There, we discussed the possibility of Government action to stop an illegal ‘phoenix company’, otherwise known as ‘phoenixing’ or ‘phoenix activity’. Today’s article is a deep dive into this particular practice: What is it, and what could be done to put a stop to it? The definition of “phoenix activity” In their 2015 report Business Set-Up, Transfer and Closure, the Productivity Commission defined illegal phoenix activity as: “the shifting of a business’s assets but not liabilities away from a…