A timely reminder to company officers and advisors that the
anti-phoenix law reforms introduced over two (2) years ago to
combat illegal phoenix activity is at work and is demonstrated in a
recent decision where a sale transaction was declared void.
The Supreme Court of Victoria recently delivered a decision
declaring that a sale of a business transaction entered by a
company immediately prior to it being placed into liquidation was a
blatant example of an illegal phoenixing activity and was clearly
considered a creditor defeating disposition pursuant to s588FDB and
s588FE(6B) of the Corporations Act 2001("the Act").
The above provision was introduced within the Act in February
2020 to combat illegal phoenix activity. This recent decision is
the first case heard in relation to this provision and potentially
sets a precedence for future decisions.
