In Estonia, approximately 600–650 companies left around €233 million unpaid over three and a half years. ERR News reports, citing Signe Viimsalu, head of the insolvency service at the Estonian Competition Authority. According to her, the data were released amid the spread of schemes involving so-called phoenix companies.
How the scheme works
The scheme, which is called “company burial” in Estonia, involves transferring operations to a new legal entity. The previous company becomes insolvent, while its debts do not transfer to the successor. Problematic firms may be transferred to nominal managers, registered abroad, or left at…