Phoenix Activity

Summary:

This project examines fraudulent phoenix activity in Australia and its regulation.

Researchers:

Project Background and Aims:

Fraudulent phoenix activity is of great concern to Australian policymakers. It occurs where there is the deliberate liquidation of a company to avoid paying debts but the business continues through another company, and in corporate groups through the liquidation of under-capitalised subsidiaries and transfer of business to other companies in the group.

This behaviour causes huge losses in taxation revenue and large financial losses for employees and unsecured creditors. To strengthen Australia's economic fabric, this project aims to determine the optimal method of dealing with fraudulent phoenix activity through a thorough examination of all of its aspects in Australia and by a comparative analysis of international responses.

Methodology:

The analysis is doctrinal and empirical.

Output:

Since the launch of the Phoenix Project, the Phoenix Research Team has been collaborating with key stakeholders and have been making submission to Government and appearing before enquiries. For example, in 2015 Professor Michelle Welsh gave evidence before the Senate Economics References Committee (SERC) inquiry into insolvency in the Australian construction industry.

Several of the Phoenix Research Team’s key recommendations made in submissions have been supported in whole or in part by the Productivity Commission and the SERC. These recommendations include the introduction of a Director Identity Number and the need for increased identity checks for directors at the time of incorporation. The team’s third and final report ‘Phoenix Activity: Recommendations on Detection, Disruption and Enforcement (February 2017)’ was released on 24 February 2017 and has been the subject of much publicity.

Research reports

Publications