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This page last updated 4 April  2017

Personal Bankruptcy and Liquidation of a Company: Information for People in Business and their Advisers (April 2017)

This publication has been jointly prepared between Australian Securities and Investments Commission (ASIC), Australian Financial Security Authority (AFSA) and the Australian Restructuring Insolvency and Turnaround Association (ARITA).

"This guide will assist people who may be both a director of a company and individually liable, and provides a clear path for people to understand their rights and responsibilities in the event of a bankruptcy and or liquidation."

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Phoenix Activity: Recommendations on Detection, Disruption and Enforcement (February 2017)

by Professor Helen Anderson, Professor Ian Ramsay, Professor Michelle Welsh and research fellow Mr Jasper Hedges - Melbourne University Law School and Monash Business School.
"The aim of this (final) report is to minimise the significant damage that is being done to the Australian economy by harmful phoenix activity without unduly inhibiting legitimate business rescues and beneficial entrepreneurialism. Our recommendations address phoenix activity that, whether presently legal or not, society should not tolerate because it causes unacceptable harm to others."
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Senate Economic References Committee - Penalties for White Collar Crime (24 March 2016)

Submission by Professors Helen Anderson and Ian Ramsay, Melbourne Law School,and Associate Professor Michelle Welsh, Department of Business Law and Taxation,Monash Business School, Monash University.
"While our research does not directly address the Committee’s terms of reference, it will be of interest to the Committee because it examines all available data on ASIC’s use of banning orders as an enforcement mechanism for behaviour that could constitute illegal phoenix activity."
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"Quantifying Phoenix Activity: Incidence, Cost, Enforcement" (October 2015)

by Associate Professor Helen Anderson, Professor Ann O’Connell, Professor Ian Ramsay, Associate Professor Michelle Welsh and Hannah Withers of the University of Melbourne Law School and the Monash Business School.
"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.
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"Defining and Profiling Phoenix Activity (December 2014)"
by Associate Professor Helen Anderson, Professor Ann O’Connell, Professor Ian Ramsay, Associate Professor Michelle Welsh and Hannah Withers of the University of Melbourne Law School and the Monash Business School.  "The concept of phoenix activity broadly centres on the idea of a second company, often newly incorporated, arising from the ashes of its failed predecessor where the second company’s controllers and business are essentially the same. It is important to note that phoenix activity can be legal as well as illegal. Legal phoenix activity covers situations where the previous controllers start another similar business when their earlier entity fails in order to rescue its business. Illegal phoenix activity involves similar activities, but the intention is to exploit the corporate form to the detriment of unsecured creditors, including employees and tax authorities. "
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"Worldwide Survey on Taking Security over Personal/Moveable Property and Collateral"
by Interlaw Banking and Finance Special Business Team, March 2015.  Extract from Introduction: "Interlaw Ltd., an Elite* global law firm network, is delighted to present this survey of how practices differ across the world when a lender takes security or collateral over moveable property. Terminology can be an issue here - some talk of "security", others of "collateral" or "charge"; some call the assets in question "moveable", others talk of "personal property"; and that's before we bring other languages into consideration. By whatever name called, we're considering taking security for finance over such things as vehicles, plant and equipment, receivables, contractual rights - in other words both tangibles and intangibles, but generally not land and buildings. With the globalisation of commerce and finance, it is of vital importance to lenders and other financiers to understand that the opportunities for taking collateral in their home jurisdictions may not exist in other jurisdictions or indeed that they may be greater in other jurisdictions. While no one can be an expert in all jurisdictions, it will be helpful to have some advance feel for what might be on offer elsewhere. This survey has been prepared by Interlaw Member law firms that participate in the network’s Banking and Finance Special Business Team. It is written in in layman's terms for the finance professional."
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at Interlaw site
"Phoenix Activity and the Liability of the Advisor"  -  by Helen Anderson and Linda Haller
[2014] SydLawRw 21; (2014) 36(3) Sydney Law Review 471
Abstract: "This article explores the liability of professional advisors such as lawyers, accountants and insolvency practitioners in giving advice to company directors in relation to fraudulent phoenix activity. It looks at the losses caused by such activity, and the nature and deficiencies of the current regulatory response. The Supreme Court of New South Wales decision in ASIC v Somerville is examined in detail, with questions asked about the utility of this decision in terms of both general deterrence and in providing clear guidance to the legal profession as to what constitutes acceptable advice in the business rescue context. Recommendations are made about ways to improve this situation."
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"AMWU's submission to 2013 Senate Inquiry into the performance of the ASIC, focussing on phoenix activity."
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"ASIC's power to wind up abandoned companies" > ASIC Consultation Paper 180. Issued 12 July 2012.
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"Bankruptcy and Insolvency" > extract from book published by Oxford University Press > June 2011
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"Directors' Disqualification: Room for Improvement" by the Association of Business Recovery Professionals, United Kingdom > November 2010 Click Here
Action against fraudulent phoenix activity.  Australian Taxation Office (ATO) Proposals Paper.  Issued November 2009.  This discussion paper provides an overview of the problems that fraudulent phoenix activities cause in the collection of tax revenue and other employee entitlements. It then presents a range of proposals for the taxation and corporations laws to address them while at the same time not impacting on legitimate business failures. Click Here
Existing mechanisms to address fraudulent phoenix activity in Australia's Corporate Law Regime.  This paper was issued in November 2009 as an annexure to the ATO's discussion paper "Action against fraudulent phoenix activity". Click Here
Duty to prevent insolvent trading: Guide for directors.  ASIC Consultation Paper 124. Issued November 2009.   Includes draft regulatory guide that sets out the key principles that ASIC considers directors need to take into account in order to comply with their duty to prevent insolvent trading, and that provide guidelines on how ASIC will assess whether a director has beached his or her duty. Click Here

Performance Audit - ASIC's Processes for Receiving and Referring for Investigation Statutory Reports of Suspected Breaches of the Corporations Act 2001  The Auditor - General, Audit Report No.18, 2006–07, Australian National Audit Office , 2007.

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ASIC's Processes for Receiving and Referring for Investigation Statutory Reports of Suspected Breaches of the Corporations Act 2001, Australian National Audit Office, 2006 Click Here
Deeds of company arrangement involving a creditors’ trust.  ASIC guide for registered liquidators appointed under Part 5.3A. May 2005 Click Here
Code of Professional Practice for Insolvency Practitioners (FINAL).  The sections of the Code on Remuneration and Independence came into effect on the 31st December 2007. The balance of the Code commenced on 21 May 2008. Click here
Code of Professional Conduct for Insolvency Practitioners. Approved and published by the Insolvency Practitioners Association of Australia on 14 December 2007.  Note:  This follows the draft code issued in September 2007 (see below). Click Here
Draft Code of Professional Conduct for Insolvency Practitioners.  Published by the Insolvency Practitioners Association of Australia as a draft for comment (September 2007).  Note: Superseded by the Code approved on 14 December, 2007 (see above). Click Here
Issues in External Administration.  Discussion paper issued by the Australian Government's Corporations and Markets Advisory Committee (CAMAC) in February 2008. Click Here
ASIC Statistics on External Administration.  An official report compiled from information supplied to ASIC by liquidators in their investigation reports.  The report is titled "External administrators: Schedule B statistics 1 July 2004 to 30 June 2007.  It was published on 26 June 2008.

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"Collection Realities For Unsecured Creditors" by Paul Morrow, Business Manager Debt Collection, Australian Taxation Office.  [Alternative titles: “The Abolition Of Crown Priority”, or “The Impact On The ATO Of The Voluntary Administration Procedure”]  [Note: this transcription was done by Peter Keenan in November 2008. I have had this seminar paper since 1993. I have published the paper because it contains important historical information about the controversial abolition of the Crown/Government priority for taxation debts.]

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"How to Set Your Retainers and Fees"  by Art Italo, 1996.  Click Here