If the company that owes you money has been wound up and the same directors are trading again next week under a new ABN, same customers, same premises, that's the classic illegal phoenix pattern. You have recourse. It's time-sensitive, and it usually runs through the liquidator, the ATO and, when it comes to it, the courts.

This is general information for creditors in Australia and is not legal advice. This page covers what to do when a debtor phoenixes. It doesn't cover the standard liquidation process (proof of debt, statutory demand as a starting move) or finding a debtor who has physically disappeared. Last reviewed: 2026.

Not every closure and reopen is illegal. Businesses restructure for real reasons, and the law allows it if creditors are treated fairly.

To distinguish a legitimate restructure from illegal phoenix activity, look at why the assets were moved and what the new entity paid for them. A legitimate restructure transfers assets at market value, deals with creditors according to law and documents the process. An illegal phoenix may transfer assets for less than they are worth, leave creditors with the old company and continue operating through a new entity.

Section 588FDB of the Corporations Act 2001 calls the illegal version a "creditor-defeating disposition" (a transfer for less than market value or the best price reasonably obtainable that prevents, hinders or significantly delays property becoming available to creditors in a winding up).

Gather the supporting records before you report the activity or brief a lawyer. You can usually assemble the initial evidence file from public registers and material you already hold.

1.ASIC register search.Look up the old company. Confirm it's in external administration and note the liquidator's name and appointment date.

1. Directors and Director ID. Pull the director details from the old company. The Director Identification Number regime means the same person carries the same ID onto any new company, so you can match them across entities.

2. ABN Lookup on the new entity. Check the new ABN, its registration date, the trading name, and the registered address.

3. Same business signals. Same premises, same phone number, same staff on LinkedIn, same website with a new footer, same customers being invoiced. Screenshot everything, dated.

4. Website archives and social posts. Use the Wayback Machine for the old site and save current posts from the new entity. These get taken down quickly once questions start.

Keep the file. The liquidator, the ATO and any court proceeding will all ask for it.

Creditors should notify the relevant regulators and the liquidator of the old company. Each has a different role in investigating the conduct and pursuing any available recovery.

ATO Phoenix Taskforce (Tax Integrity Centre tip-off). The Taskforce coordinates the ATO, ASIC and other agencies investigating illegal phoenix behaviour. From the start of its operations to 30 June 2025, it raised more than $2.90 billion in liabilities through audits and reviews and returned more than $1.24 billion to the community. In 2024–25, it received 3,714 referrals through the Tax Integrity Centre, completed more than 1,500 audits and reviews, and collected over $137 million in cash.

ASIC misconduct report. ASIC handles the corporate law side, including director disqualification and creditor-defeating disposition breaches.

The liquidator of the old company. The liquidator can investigate how the company’s assets were handled and use statutory powers that individual creditors do not have. Send your evidence early so it can be considered during the investigation while the relevant records and transaction details are still available.

The Corporations Act 2001 gives the liquidator several ways to recover money or assets for unsecured creditors. A creditor can assist by providing transaction records and any evidence showing where the company’s assets or money went before liquidation.

• Unfair preference (s588FA). A transaction that gave an unsecured creditor more than they would receive in a winding up. If the debtor paid a related party or a favoured supplier in the months before collapse, that money can be clawed back.

• Voidable transactions (s588FE). An insolvent transaction may be voidable if it was entered into during the 6 months ending on the relation-back day (broadly, the date insolvency proceedings started). Flag this timeline to the liquidator early. It's the single most important date in the file.

• Creditor-defeating disposition (s588FDB). The core phoenix provision. If assets left the old company for less than market value, the liquidator can pursue their return.

Recovered funds go into the liquidation pool and are distributed to unsecured creditors. It's rarely 100 cents in the dollar, but it's not zero either. For a broader view of the process from demand to distribution, see how debt recovery works in Australia.

Creditors often ask whether they can pursue the director personally. Liability does not arise merely because the company cannot pay its debts, and the enforcement mechanisms discussed here generally operate through the ATO or ASIC rather than through a direct claim by the creditor.

Director Penalty Notice (DPN). The ATO issues these, not creditors. A DPN makes the director personally liable for the company's unpaid PAYG withholding, GST or super. Under ATO Practice Statement PS LA 2011/18, the ATO cannot start recovery proceedings against the director until 21 days after the notice is given. Within that window the director can pay, appoint an administrator, a Small Business Restructuring practitioner, or a liquidator to remit the penalty. If PAYG or GST was reported more than 3 months late, the DPN is "locked down" and cannot be remitted that way. The ATO issued 64,342 director penalty notices in 2024–25, so this isn't a theoretical lever.

ASIC director disqualification. ASIC can disqualify directors involved in repeated failures. Disqualifications rose from 14 in 2024–25 to 36 in 2025–26. Managing a company while disqualified carries a maximum penalty of 5 years' imprisonment.

If you have strong evidence that the director stripped assets and left you unpaid, that evidence belongs in front of the liquidator, the ATO and ASIC. For an agency view of pushing files through to enforcement, our legal and compliance page sets out how we handle it.

A subcontractor is owed $80,000 by a head contractor. The head contractor goes into creditors voluntary liquidation. A month later, the same two directors are running a new company, same site foreman, same clients, new ABN.

The subbie's sequence:

1. ASIC search on the old company. Note the liquidator.

2. Director ID cross-check. Same directors on the new entity, confirmed.

3. Tip-off to the ATO Phoenix Taskforce with the evidence pack.

4. Email to the liquidator with the same pack, flagging the relation-back day and any payments made to related parties in the 6 months before appointment.

5. Place the file with a firm that can move to legal action if the liquidator investigation and negotiation don't produce a result.

Construction was the largest industry for insolvencies in FY2025–26 with 3,472 external administration appointments, well ahead of any other sector. If you supply into construction, phoenix patterns are worth knowing cold. Our construction debt recovery page covers the sector specifics.

After construction, accommodation and food services was the next hardest hit with 2,078 appointments in FY2025–26. The hospitality phoenix pattern is familiar. The venue closes on a Sunday, reopens on Wednesday under a new entity, same operator, same menu, same staff, new signage on the door. Suppliers of food, liquor, laundry and equipment are left with the old company. If this is your industry, hospitality debt recovery covers how we work these files. Manufacturing and wholesale creditors see it too, usually as trade suppliers to a phoenixed retailer or fabricator.

Not every phoenix file needs court. Some resolve when the new entity gets a properly framed demand and realises the evidence pack exists. Others need to be pushed.

Court action typically comes into play when:

• Demand and negotiation have run out and the new entity is ignoring correspondence.

• There's a debt legitimately owed by the new entity (sometimes there is, for goods supplied after the switch) and a statutory demand (a formal demand under the Corporations Act that can lead to a winding-up application if not met within 21 days) is on the table.

• The liquidator is running a claw-back and you are supporting it with your evidence and, in some cases, funding.

Where legal review or court action is required, eCollect can refer the matter to eCollect’s associated legal firm, E C Legal. eCollect and E C Legal have established systems and processes that allow matter information and supporting data to be transferred in a format the solicitors can quickly understand and assess. eCollect staff are also trained in preparing matters for legal review. As a result, the cost of engaging E C Legal will generally be significantly lower than engaging an unrelated external law firm. However, the referral, legal opinion, initial assessment and any subsequent legal action should not be assumed to be free. Learn more about E C Legal’s litigation services.

Phoenix recovery is possible, but the useful moves have time limits and the evidence gets harder to gather every week. If your debtor has closed down and reopened under a new name, send us the file for a free debt appraisal. No obligation, and we'll tell you what we think is recoverable and how.

This page is general information for creditors in Australia and not legal advice. Last reviewed: 2026.

• ASIC Insolvency Statistics Series 1 and 2, published 24 August 2026

• ATO supplementary submission to the Parliamentary Joint Committee on Law Enforcement

• ANAO performance audit: ATO management of small business taxpayer debt

• ATO Practice Statement PS LA 2011/18

• Corporations Act 2001

• ASIC media release 26-185MR