Phoenix bill moving forward
Companies that close and re-open to avoid debts will soon face a major crackdown.
Regulators are being granted increased powers to address ‘phoenix’ activity - when executives gut a business and move assets to another company to avoid paying outstanding liabilities, like tax, wages and debt.
A bill has passed the Senate that grants regulators greater powers to detect and address phoenix activity, including prosecuting company directors.
Pre-insolvency advisers may also face penalties.
The government also plans to give the Australian Securities and Investments Commission $8.7 million in new funding to help fund liquidators to root out the shonky practice.
Labor amended the laws to have them reviewed after five years, so the bill will now return to the lower house for final approval.