Crackdown on ‘phoenix’ companies put on hold for ‘Urgent Review’

Legislation to improve the process for ‘pre-pack’ insolvencies, where firms about to collapse can be restructured and sold, has been put on hold while an “urgent review” takes place. The new laws, which were supposed to be introduced in April 2012, were designed to increase transparency and confidence in the pre-pack process, and clamp down on ‘phoenix’ companies that collapse and start trading again under another name while leaving former creditors unpaid. The FPB urged the Government not to delay the legislation, and to revisit earlier proposals in order to better protect creditors.