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My mother, Theresa Stewart, who has died aged 90, was the Labour leader of Birmingham city council, the UKs largest local authority, from 1993 to 1999. She was the first, and is still the only, woman to hold the post.
During that time, she moved the council away from spending on infrastructure and convention centres to a focus on social services and education. Under Theresas leadership, Birmingham was rated Britains best local authority in the 1998 Local Government Chronicle awards.
Birmingham hosted the G8 summit in 1998. Theresa met Tony Blair and Bill Clinton and had tea with Boris Yeltsins wife, Naina. However it was the photo of her meeting with Nelson Mandela on his visit to Birmingham in 1993 that had pride of place on her mantelpie…
Throughout the coronavirus crisis, CBS is providing weekly updates on the number of bankruptcies pronounced by Dutch courts. The weekly updates are normally released on Thursdays at 12.00 p.m.
Not including sole proprietorships, there were 46 bankruptcies in week 47, 14 more than in week 46. In addition, 9 sole proprietorships were declared bankrupt, 1 more than in the previous week.
Number of bankruptcies of businesses and institutions (including sole proprietorships), weekly
Nov 26 (Reuters) – Bodycote Plc said on Thursday it would carry out another restructuring, similar to the one in the first half that included more than 900 job cuts, as it expects the civil aerospace market to remain weak for at least the next 18 months.
The heat treatment and thermal processing company said the restructuring will be more focused on its aerospace, defence and energy business.
The companys employee headcount was down to 4,813 as of Oct. 31 from 5,764 at the beginning of the year.
Group revenue fell 18% to 500.3 million pounds ($668.95 million) for the 10 months to Oct. 31, largely due to weakness in the civil aerospace business, Bodycote said.
Supreme Court had dismissed SBI’s plea seeking resumption of insolvency proceedings against Anil Ambani
New Delhi:
The Supreme Court Wednesday said it will pass orders on a batch of pleas filed by Insolvency and Bankruptcy Board of India (IBBI) seeking the transfer of all petitions pending before different high courts challenging the provisions of Insolvency and Bankruptcy Code (IBC) with regard to personal insolvency.
A bench of Justices LN Rao, Hemant Gupta and Ajay Rastogi favoured the transfer of all the pending writ petitions challenging provisions of IBC on insolvency of personal guarantors and reserved its verdict.
Additional Solicitor General Madhavi Divan, appearing for IBBI, said that questions of law raised in these wri…
For almost 15 years, Trygve “Spike” Magelssen says he faithfully paid down his student loans each month, slowly chipping away at the original debt of $53,000, even as medical bills, a home improvement loan and other costs left him “financially up against a wall.”
Then in late 2018, Magelssen, an associate professor of electrical technology at Montana State University-Northern, wondered if he might benefit from Congress’ temporary expansion of the so-called Public Service Loan Forgiveness program. Public servants, including teachers, health care workers and law enforcement, can apply under certain requirements, and must make 10 years’ worth of payments before the loan’s remaining balance can be erased.
Phone and internet customers say they are being disconnected, harassed by debt collectors and generally treated harshly by their telco providers when they need help, negatively impacting mental health.
Key points:
The Consumer Action Law Centre has released a report detailing the failures of telco providers to help customers with mounting debt
One woman said a telco company rejected her request to go on a payment plan despite being pregnant and on JobSeeker
The Consumer Action Law Centre’s CEO said the stories were proof telecommunications providers needed stronger regulation
The Consumer Action Law Centre has released a report detailing stories of people struggling to pay their phone and internet bills, with some fearing homelessness due to…
Thousands of small- and medium-sized companies in India have missed loan payments and are staring at a prolonged period of distress owing to the pandemic while the larger ones have held their ground and, in some cases, thrived, loan recast data from top lenders showed.
Micro, small and medium enterprises (MSMEs) make up the overwhelming majority of companies that are seeking easier loan repayment terms from banks under the Reserve Bank of Indias special restructuring window for those affected by the coronavirus pandemic, according to the data.
While the trend is along expected lines, given the severe distress faced by businesses, senior bankers said that emerging data suggests that a disproportionately large number of MSMEs have been h…
In tribute to Diego Maradona, we revisit one of his finest hours as a member of Napoli’s UEFA Cup-winning team of 1989 the last time the southern Italian side achieved European glory.
Inspired by Maradona, the previously unheralded Partenopei enjoyed success both at home and, culminating in this scene after their 5-4 aggregate win over VfB Stuttgart in the final, abroad.
1. Raffaele Di Fusco The eternal deputy, goalkeeper Di Fusco made just 34 Serie A outings for Napoli despite being on the books for much of the period between 1983 and 1998, barring brief stints with Catanzaro and Torino. One of those matches came as a striker: during a 1989 game against Ascoli, with several team-mates struggling, he came on 11 minutes from t…
Yingli Green Energy, the holding company once listed on the New York Stock Exchange (NYSE), has now been liquidated, unable to repay long-term debt owed to Yingli China. Total debts to a number of banks of Yinglis China-based subsidiaries, many directly involved in manufacturing operations, topped US$2.3 billion in 2013.
Yingli Green Energys annual revenue peaked in 2011 at around US$2.4 billion. As the chart below highlights, by 2014 other companies had surpassed Yingli in revenue terms. Benchmarked against other China centric …
(Bloomberg) — Stronger African economies dont need debt relief from bondholders, whose money will be crucial to help finance the recovery of the continent, according to Senegal Economy and Planning Minister Amadou Hott.
Senegal is one of 46 low-income nations that got a waiver on bilateral debt payments until the first half of 2021 under a plan by the Group of 20 major economies to ease the blow of the coronavirus pandemic. The G-20 has chided private creditors for not joining the relief drive, which has deferred $5.7 billion in interests and principal so far.
However, only a limited number of heavily indebted African countries require a moratorium from commercial creditors, Hott said in a written response to questions.
‘Phoenix activity’ is a broad term commonly recognised in the solvency world for its ability to help company controllers avoid the stress and pain of standing over a failed business. Phoenix activity, however, runs the full gauntlet of positive and negative implications, as it applies to illegal activity, a legal phoenix restructure and even the shady parts in between.
What is phoenix activity?
The term draws inspiration from the mythical fiery bird that bursts into flames after death, only to be reborn from its own ashes. Phoenix activity broadly works in the same way – a second company rises from the proverbial ashes of its failed predecessor, but its business is essentially the same and is controlled by the same owners and directors.
For example…
Imagine a company in financial difficulty. The company directors, however, are not ready to walk away. Typically when a company is insolvent, it is placed into liquidation or voluntary administration, or is simply left dormant (and may then be deregistered). Before this happens, phoenix activity takes place when the company’s assets are transferred either to a newly formed company or an existing entity, such as a related company in a corporate group. The company is then able to continue its existence having altered from its original state.
Legal phoenix activity – the legal phoenix restructure
Legal phoenix activity is also known as ‘business rescue’ or a ‘legal phoenix restructure’. The legal phoenix restructure works when a company enters into an agreement to sell or transfer its business and or assets. The phoenix company, or old company, can do this with an existing company of a similar operation or with a newly incorporated entity. With the business and assets moved away from the old company and into a fresh vessel, company controllers like owners and directors can carry on their business operation without any significant looming debts or interruption.
The legal phoenix restructure remains legitimate as long as the company controllers have not breached any directors’ or officers’ duties as per the Corporations Act 2001 (Cth). It also counts as a legal business rescue if, in the act of winding up the old company, external administrators (like liquidators or administrators) have successfully carried out their duties in accordance with the Corporations Act 2001 (Cth) and their professional obligations.
Remember
Legal phoenix activity is defined as activity to rescue a business with no intention to defraud creditors. A legal phoenix restructure includes a company controller who has complied with their legal obligations and acted in the best interest of the company and its creditors.
Many company controllers turn to a legal phoenix restructure because they believe their business would be better off than if they were to resort to company liquidation. Legal phoenix activity is often preferred for a number of reasons including:
Company controllers may have a strong personal desire to see their business succeed or may have incentives to try again;
The phoenix company may have strong prior client connections or business relationships that can help its new existence; or
Company controllers may be seasoned professionals with knowledge of the products, equipment and markets needed to succeed under a new company.
Why turn to legal phoenix activity?
Those who turn to phoenix activity to resurrect their business without the intentionally defrauding creditors may do so for a number of reasons.
For example, a company owner might wish to re-enter the market because their company failed due to factors outside their control, like an industry strike.
Here are some other reasons why company controllers may turn to legal phoenix activity:
Company controllers learn from their mistakes and are willing to apply the lessons they learned to ensure their second wind at business is successful.
A company that was financially viable is liquidated too early because nervous company controllers were too cautious of insolvent trading.
Poor company controllers are bought out of their positions by new managers who have the skills, resources, ideas and experience to ensure a phoenix business run successfully
Illegal phoenix activity
Pulling a new company from the ashes of a failed predecessor may sound like a noble attempt at keeping the entrepreneurial spirit alive, but phoenix activity often has serious legal ramifications if it is not done correctly.
Phoenix activity becomes an illegal practice with the intention of avoiding debts and paying creditors. Company controllers may transfer their old company’s assets into a new entity, without paying true or market value. Once the old company’s assets are transferred, the company is then placed into liquidation and a new company takes its place under a new name and potentially in a new location. The new company, under the direction of the same company controllers, is free to operate without any of the significant debts that the old company should have paid to creditors.
Consequences of illegal phoenix activity
According to the Australian Securities and Investment Commission (ASIC), illegal phoenix activity can result in criminal penalties including large fines and up to 15 years imprisonment. Anyone involved in illegal phoenix activity, including pre-insolvency advisors, valuers and liquidator – not just company controllers – can be implicated and punished. Punishment is often on the grounds of breaches of director’s duties, fraudulent concealment or removal of assets and fraud by company officers under the Corporations Act 2001 (Cth).
'Problematic' phoenix activity
Those who attempt a legal phoenix restructure may not be immune from the legal ramifications and not those who are found guilty of illegal phoenix activity may have been acting with malicious intent. Sometimes a company controller may move to ‘phoenix’ their insolvent company with no intention of cheating their debt, but doing so has no benefit to their creditors.
Sometimes, a resilient (or perhaps stubborn) company controller with poor business skills is determined to succeed and refuses to learn their lesson, despite leaving a trail of failed companies and phoenix activity behind them. While they might not have the malicious intention of defrauding their creditors, their continued activity can have greater impact on a larger group of creditors as time goes on.
A legal phoenix restructure is a ‘business rescue’ when a company enters into an agreement to sell or transfer its business and or assets into a different or newly incorporated entity. The process is legal as long as company controllers have not breached any directors’ or officers’ duties as per the Corporations Act 2001 (Cth).
Illegal phoenix activity occurs when a failed company deliberately transfers its assets and business into a new entity before liquidation, in order to continue operating without having to pay outstanding debts, including taxes, creditors and employee entitlements.
Phoenix activity becomes problematic when it is performed with pure intentions but still negatively affects creditors. Problematic phoenix activity often occurs when a company director with poor business skills continuously revives their company because they are determined to make it work, but instead creates a growing list of unpaid creditors.
When this occurs, phoenix activity is no longer legal. Instead it is known as the ‘problematic phoenix’. This situation may not be blatantly illegal, but it does require governing entities like ASIC to intervene to stop an offending company controller from creating yet another phoenix company.
According to section s 206F of the Corporation Act 2001 (Cth), ASIC has the power to disqualify a person from managing a corporation for up to five years if, within the past seven years, the person has been an officer of two or more companies that were wound up and the liquidator lodged a report under s 533(1) about the company’s inability to pay its debts. ASIC must be satisfied that the disqualification is justified but in so doing can prevent additional phoenix activity that could cause increasing harm to creditors and the economy.
Want to know more about phoenix activity, or need information about another insolvency matter?
Years ago, Rose Blozinski of the Wisconsin Council on Problem Gambling took a phone call from a woman who was in big trouble.
“A stay-at-home mom did some online gambling and said, ‘I owe them $30,000,'” Blozinski said of the phone call from the anonymous woman to the Council’s helpline. “We gave her resources to contact for help with her addiction. But I never heard from her again and I don’t know how it turned out.”
That happened more than two decades ago, but fears about online gambling,which has been rising amid the COVID-19 pandemic,have returned andintensified.
