At the Coalface of Corporate Insolvency and Phoenix Activity: A Survey of ARITA and AICM Members

Insolvency Law Journal, Vol. 24, No. 3, pp. 209-216, 2016

11 Pages Posted: 3 Dec 2016

See all articles by Helen L. Anderson

Helen L. Anderson

Melbourne Law School

Jasper Hedges

Australian National University, Research School of Social Sciences

Ian Ramsay

Melbourne Law School - University of Melbourne

Michelle Anne Welsh

Monash Business School

Date Written: December 2, 2016

Abstract

This research note presents the findings of surveys of members of the Australian Restructuring, Insolvency and Turnaround Association and the Australian Institute of Credit Management regarding illegal phoenix activity and related issues. Phoenix activity occurs where a successor company arises from the ashes of its failed predecessor and the successor company’s controllers and business are essentially the same as those of the predecessor. Phoenix activity is illegal where the controllers’ intention is to shift assets from the predecessor company to the successor company to avoid liabilities such as unsecured debts, employee entitlements, taxes, adverse court judgments and fines. Key findings of the surveys included that illegal phoenix activity is commonplace and where it occurs, significantly reduces returns to creditors. Respondents also expressed concerns regarding the adequacy of both laws and enforcement and offered views on several law reform proposals.

Keywords: Phoenix activity, insolvency

Suggested Citation

Anderson, Helen L. and Hedges, Jasper and Ramsay, Ian and Welsh, Michelle Anne, At the Coalface of Corporate Insolvency and Phoenix Activity: A Survey of ARITA and AICM Members (December 2, 2016). Insolvency Law Journal, Vol. 24, No. 3, pp. 209-216, 2016. Available at SSRN: https://ssrn.com/abstract=2879229

Helen L. Anderson

Melbourne Law School ( email )

University of Melbourne
Melbourne, 3010
Australia
+61 3 90355467 (Phone)

Jasper Hedges

Australian National University, Research School of Social Sciences ( email )

Canberra
Australia

HOME PAGE: http://www.anu.edu.au

Ian Ramsay (Contact Author)

Melbourne Law School - University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 5332 (Phone)

HOME PAGE: http://law.unimelb.edu.au/about/staff/ian-ramsay

Michelle Anne Welsh

Monash Business School ( email )

Wellington Road
Clayton, Victoria 3168
Australia

Register to save articles to
your library

Register

Paper statistics

Downloads
69
Abstract Views
440
rank
339,446
PlumX Metrics