Phoenix company (Ro.: societate comercială rezultată din procedura de insolvență a unei alte companii – similar reorganizării, Cz.: společnost založená ze společnosti v úpadku, Cr.: tvrtka osnovana od strane tvrtke u stečaju(See also: sale of assets, transactions at undervalue, insolvent trading, fraudulent trading, pre pack liquidation, liquidation, administration) =  a company that is formed on the basis of the insolvency of another company.

The term is common-law specific and it does not have a legal basis. Doctrinarians came up with it, although there is plenty of legislation regarding the concept.

To be legal, a phoenix company has to abide to the following rules:

-the new company should buy the assets of the old company at the best possible price on the market

-the interests of the creditors should be highly regarded in the period prior to the liquidation of the old company

-the new company should not have the same or a very similar name to the old one


Useful links

Legislation - The Corporations Amendment (Phoenixing and Other Measures) Act 2012, Australia – Companies Act 1993, New Zealand - The Insolvency Rules 198, UK

Case law - Grove v TSSN Ltd (in liq) [2012] HC 2402 

Publications - What is a phoenix company? -  Geoffrey McDonald, Why are phoenix companies so hard to define?, October 2013 - Phoenix Companies, November 2009 - The Insolvency Service - Business and Enterprise Committee Contents 

Online publications – Davies P.L., 2010, Introduction to Company Law, Oxford University Press, pages 92-93 – De Lacy J., 2013, Reform of UK Company Law, Routlege - Great Britain: Parliament: House of Commons: Business, Innovation and Skills Committee, Bailey A, 2013, The Insolvency Service: Sixth Report of Session 2012-13, Report, Together with Formal Minutes, Oral and Written Evidence, Volume 675 of HC (Series) (Great Britain. Parliament. House of Commons), The Stationery Office, pages 89-90


By Bianca Alexandra Prunea