THE POTENTIAL ECONOMIC GAINS FROM INCREASING PUBLIC LAW ENFORCEMENT AGAINST ILLEGAL PHOENIX ACTIVITY
Jasper Hedges, Ian Ramsay, Michelle Welsh, Helen Anderson
Monash University Law Review | MONASH UNIV, FAC LAW | Published : 2018
Illegal phoenix activity the practice of liquidating or abandoning a - company with the intention of avoiding its obligations and then continuing the same or a similar business via a new or related company-is estimated to cost the Australian economy up to $3.5 billion per year and appears to be increasingly prevalent. Yet public law enforcement agencies rarely take enforcement action against illegal phoenix activity. This article argues that, based on an analysis of the potential costs and benefits of increasing public law enforcement against illegal phoenix activity, enforcement should be increased, subject to periodic review. Empirical studies suggest that the aspects of enforcement th..View full abstract
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Awarded by Australian Research Council
Jasper Hedges is Research Fellow, Melbourne Law School, University of Melbourne; Ian Ramsay is the Harold Ford Professor of Commercial Law, Melbourne Law School, University of Melbourne; Michelle Welsh is Professor and Head of Department, Department of Business Law and Taxation, Monash Business School, Monash University; and Helen Anderson is Professor, Melbourne Law School, University of Melbourne. The research reported in this article was funded by the Australian Research Council: DP140102277, 'Phoenix Activity: Regulating Fraudulent Use of the Corporate Form'. We thank the two anonymous referees for their helpful comments on an earlier draft of this paper.