Phoenixing meaning

The Insolvency Service Situated within the Department for Business and Trade, the Insolvency Service is tasked, among other things, with: overseeing bankruptcies and debt relief orders; managing company liquidations; investigating related financial misconduct and director misconduct; enforcing company and insolvency law across the UK. The transfer of functions from the Department for Business, Energy and Industrial Strategy in 2017 made the Insolvency Service a prosecuting authority in its own right. The Strategy underlines its role as a prosecuting agency, with a core focus on strengthening investigation and enforcement by intensifying enforcement of the Companies Act, and building the capacity and capability to investigate and take action against companies and directors...

How is the Insolvency Service changing? Dave Magrath, the Insolvency Service’s director of investigation and enforcement services, is guiding the agency into an expanded role set out in its new strategy to intensify investigations and enforcement. The plan features the hiring of 250 staff to support the Insolvency Service’s widening remit. That remit now reaches into prosecuting a broader array of economic crime offences against both individuals and companies. This expansion, revealed in July 2025, follows the Economic Crime and Corporate Transparency Act 2023, which introduced over 100 additional offences the service can prosecute under the Companies Act 2006. The agency has also received extra funding to shoulder greater responsibilities. In 2024, the Insolvency Service has helped secure convictions for 77 individuals, disqualified around 1,000 directors, and wound up 41 companies. The government has recently transferred enforcement of coronavirus (COVID-19) loan scheme cases to the agency, which had already been dealing with part of that caseload. Magrath is confident the expansion will enable the Insolvency Service not only...

What is asset stripping? Asset stripping is the contentious practice of buying a company and intentionally running down its assets for personal advantage or to boost short-term returns. One form of asset stripping is ‘phoenixing’, where directors wind up or walk away from a company to sidestep creditor liabilities and then carry on the same business through a new or connected entity. Phoenixing The establishment of a phoenix company is a variant of asset stripping. A phoenix company arises when the business of an insolvent company is transferred to a new company, leaving the debts and liabilities with the insolvent entity. Phoenix companies typically operate in the same line of trade as the former (now insolvent) company, have the same or largely the same directors as the predecessor, and in some instances use a similar name to it. Re-use of the company name Under section 216 of the Insolvency Act 1986 (IA 1986), phoenix companies are prohibited from re-using the predecessor company’s registered name and...

This glossary sets out numerous expressions frequently encountered in the restructuring arena. Words appearing in the definitions in bold are explained in other entries in this glossary. For further banking terminology, see the principal Banking & Finance Glossary. Restructuring glossary—A Acceleration: Acceleration means the agent, acting on directions from the majority lenders after an event of default, takes formal action, for example calling for early repayment of the facility. Ad-hoc committee: A temporary creditors’ group (often contrasted with a formal committee) that lacks any entitlement to official recognition. Administration: A process under the IA 1986 in which a financially distressed company is operated by an administrator as a going concern before longer-term outcomes, such as break-up and sale, are pursued. Administrator: An Insolvency Practitioner named by the court, a Qualifying floating charge holder, the directors or the company, to take control and fulfil one of the purposes in IA 1986, Sch B1. Administrative receivership: Arises when a company breaches the terms of...

This glossary sets out numerous expressions regularly encountered in the restructuring & insolvency sphere. Words shown in bold within definitions are themselves explained in other entries in this glossary as well. A Article X The MLIJ contains a single provision named Article X, aimed at jurisdictions that have already implemented the MLCBI, like England, or are weighing its adoption. Article X states: ‘Not withstanding any prior interpretation to the contrary, the relief available under [insert a cross-reference to the legislation of this State enacting Article 21 of the UNCITRAL Model Law on Cross-Border Insolvency] includes recognition and enforcement of a judgment’ (see Practice Note: UNCITRAL model law on recognition and enforcement of insolvency-related judgments (MLIJ): Article X). Asset-backed security (ABS) A form of security anchored by asset pools, for example loans, leases, and credit card receivables. Assimilated law From 1 January 2024, ‘retained law’ has been retitled ‘assimilated law’. The body of domestic law originally arising from EU obligations, created by the European...