Putting out the fire – cracking down on illegal phoenix activity

‘We didn't start the fire
It was always burning since the world's been turning
We didn't start the fire
No, we didn't light it, but we tried to fight it’¹

The Illegal Phoenix 
Illegal phoenixing is a major problem in corporate Australia.  In this post we consider what illegal phoenix activity is, how the problem is affecting the Australian economy and the recent regulatory crackdown on the issue.

In Greek mythology a phoenix is a mythical bird which obtains new life by rising from the ashes of its predecessor.  Illegal phoenix activity involves the intentional transfer of assets at an undervalue from an indebted company to a new ‘phoenix’ company.  The old company remains with its debts and is often placed into liquidation (or is left to be wound up on the application of a creditor) – stripped of any valuable assets, with nothing left to pay creditors.

Queensland: A fraudulent State of mind? Jail time for former Kleenmaid and Wickham Securities directors

In recent months the Queensland District Court has found the directors of two former Queensland based companies guilty of fraud.  This will hopefully bring a small amount of relief to those who have suffered at the hands of the fraudulent directors in question.