A former recruitment executive whose company was allowed to repay debts in instalments after accumulating nearly three million pounds in liabilities has now placed his new business into liquidation, failing to meet agreed payment terms with administrators. The case highlights growing concerns over "phoenixism," a contentious accounting practice where directors dissolve struggling companies only to re-emerge with fresh ventures while avoiding past financial obligations. Critics argue the tactic undermines creditors and raises ethical questions about corporate accountability. The development adds to scrutiny of how such arrangements are overseen and enforced.
New company reportedly quickly fell behind with promised repayments to administratorA recruitment executive who was allowed to buy back the assets of his bust company in instalments, despite it accumulating almost £3m of debt, has placed his new business into liquidation after falling behind with promised payments to the administrator.The news is the latest event to raise questions about the practice of “phoenixism”, accounting’s controversial art of liquidating companies to allow directors to return with a new entity, free of debts. Continue reading...
