Quantifying Phoenix Activity: Incidence, Cost, Enforcement

Abstract

Phoenix activity occurs where the business of a failed company is transferred to a second (typically newly incorporated) company and the second company’s controllers are the same as the first company’s controllers. Phoenix activity can be legal as well as illegal. The aim of this research report (which forms part of a larger research project) is to capture all available data relating to the incidence, cost and enforcement of laws dealing with illegal phoenix activity. The report (1) provides background information on the regulators and other enforcement agencies dealing with illegal phoenix activity; (2) provides data about the incidence, cost and enforcement of laws dealing with illegal phoenix activity including data collated and tabulated by the researchers from publicly-available sources and data obtained directly from regulators which is not otherwise available to the public; (3) highlights the disparity of information obtained from different sources; and (4) encourages the government to put in place better data-gathering mechanisms.