The Fight to Combat Illegal Phoenixing
February 19, 2026
Author name
With the recent introduction of the Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020 (Cth) (Illegal Phoenixing legislation), the law has been heightened to restrict and punish those engaging in illegal phoenix activity.
The long-awaited legislation will enable the Australian Securities and Investments Commission (ASIC), the Australian Taxation Office (ATO) and insolvency practitioners to take increased action to combat this illegal activity, and will require directors to carefully consider their company obligations.
What is illegal phoenix activity?
Illegal phoenix activity involves the stripping and transferring of an entity’s assets to a new entity, thereby denying any creditors of the old entity access to those assets to meet unpaid debts. Essentially, this allows directors to continue operating the same business under a new entity without any, or with limited, liability.
There are a number of people usually involved in phoenix activity, including:
- pre-insolvency adviser – an adviser who encourages phoenix activity by maintaining a network of ‘friendly’ professionals who assist companies in financial trouble;
- valuer – a valuer who provides low valuations of the company’s assets;
- liquidator – a liquidator who doesn’t investigate the affairs of the company, attempt to recover illegally removed assets or report their findings to ASIC and creditors;
- dummy directors – fake directors appointed to the old company just prior to its failure or to the new company that aren’t involved in the running of either company; and
- phoenix operators – the controlling minds behind the phoenix activity and the people that ultimately benefit from it.
Illegal phoenix activity has a significant impact on sub-contractors, creditors and employees that are left unpaid, as well as the broader community because the entity avoids paying tax and other entitlements which the government often subsidises. The Economic Impact of Potential Illegal Phoenix Activity Report estimates that phoenix activity costs the Australian economy $2.85 to $5.13 billion dollars annually, with between $31 to $293 million dollars in unpaid employee entitlements.
Illegal Phoenixing legislation amendments
The amendments to the Corporations Act 2001
(Cth) and Taxation Administration Act 1953
(Cth) arising out of the Illegal Phoenixing legislation aim to target those involved in illegal phoenix activity to prevent it from occurring.
Some key amendments are:
- introduction of the creditor defeating disposition, a concept whereby the disposition of company property is a creditor defeating disposition if the consideration payable for the property was less than market value or the best price reasonably obtainable for the property and the disposition has the effect of preventing the property from becoming available, or readily available, for the benefit of creditors;
- introduction of new phoenix offences and civil penalty provisions which carry the highest penalties available under the law to target those who conduct or facilitate phoenix activity (large fines and imprisonment up to 15 years);
- provision of new recovery powers to ASIC and liquidators to improve their ability to recover assets lost through phoenix activity;
- preventing directors from improperly backdating resignations or resigning where the company would be left with no directors to avoid liability or prosecution;
- extending director penalty provisions making directors personally liable; and
- expanding the ATO’s power to retain refunds where there are outstanding tax lodgements.
What this means for you
The Illegal Phoenixing legislation is a reminder of the importance to seek advice and assistance before entering into contracts for the provision of goods and services and transferring/selling a business to ensure you are protected from engaging in or being affected by illegal phoenix activity.
Danielle Williams (Solicitor)
If you would like further information in relation to how the above matters may affect you, please contact us on (08) 9321 5451 or by email danielle@bailiwicklegal.com.au. For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au/
The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.
Bailiwick Legal has been honoured to support Forever Wild over the past few years as they delivered one of the most significant conservation land acquisition programs undertaken in Western Australia. Our team assisted Forever Wild with the strategic purchase of four pastoral stations, Narndee , Boodanoo , Meeline and Challa , transactions that now connect three State Reserves and protect more than 12,000 square kilometres of land. To put that scale into perspective, the combined area is approximately five times the size of the ACT and nearly one-fifth the size of Tasmania . Navigating complexity at scale These were not straightforward property transactions. Each acquisition involved: Multiple pastoral leases Layered regulatory and approval pathways Significant operational and on-ground assets Numerous stakeholders across government, industry and land management Our role was to guide Forever Wild through this complexity with clarity, precision and confidence, ensuring each transaction progressed efficiently while managing risk and safeguarding long-term objectives. “ Forever Wild is creating a world-leading model for nature funding that demonstrates we can manage viable, working pastoral stations whilst also restoring and protecting local ecological flora and fauna, and engaging and supporting Indigenous people and local communities. Complex & challenging, but this initiative could literally change the world .” Jessica Brunner - Director, Bailiwick Legal A growing and evolving legal landscape Large-scale conservation acquisitions sit within an emerging and increasingly complex legal field , intersecting land tenure, pastoral regulation, environmental frameworks and commercial considerations. These matters demand a deep understanding of both the legal mechanics and the practical realities of operating in regional and remote Australia. Our team’s experience in agribusiness, pastoral land transactions and regulatory approvals allowed us to support Forever Wild at every stage, from strategic structuring through to completion. Proud to support leadership in nature finance Forever Wild is widely recognised as an industry leader and a steadfast advocate for nature finance initiatives , helping pave the way for greater accessibility and innovation in conservation funding and land stewardship. We are proud to have contributed our relationships, expertise and practical legal insight to help Forever Wild achieve its vision, and to have played a role, however small, in shaping a groundbreaking future for conservation in Australia. At Bailiwick Legal, we value the opportunity to work alongside organisations that are thinking long-term, acting boldly, and creating outcomes that extend well beyond the transaction itself. For assistance with all of your agribusiness needs, contact Bailiwick Legal on 08 9321 5451 or email office@bailiwicklegal.com.au For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.
Bailiwick Legal Advises on Landmark Acquisition of Rawlinna Station by Consolidated Pastoral Company
Bailiwick Legal is proud to have acted for Consolidated Pastoral Company (CPC) in its successful acquisition of Rawlinna Station , Australia’s largest sheep station, located on the remote Nullarbor Plain in Western Australia. Spanning over 1 million hectares and running approximately 30,000 sheep , Rawlinna is an iconic pastoral asset with a rich legacy, having been held by the MacLachlan family’s Jumbuck Pastoral Company since its establishment in 1962. The sale marks the first change of ownership in over six decades and was finalised following formal approval from the Western Australian Government for the transfer of the pastoral leases. This transaction involved navigating: The transfer of three separate pastoral leases Coordination across multiple vendor entities Consideration of livestock and operating assets Fulfilment of regulatory and compliance requirements, including WA lease approval processes Bailiwick Legal is a boutique agricultural and regional law firm , proudly based in Perth and Bridgetown, Western Australia. Our role in this acquisition demonstrates that deep sector knowledge, local insight, and personalised legal support are crucial for agribusiness clients managing complex, high-value transactions. Our team, led by our regionally-based solicitor, Matilda Lloyd, provided end-to-end legal and strategic support, including: Due diligence on land tenure and operating assets Contract negotiation and preparation Advice on regulatory approvals and compliance Strategic coordination with CPC’s internal and external stakeholders to ensure a smooth and timely settlement We are honoured to have supported CPC in this milestone acquisition and look forward to watching Rawlinna’s next chapter unfolds. At Bailiwick Legal, we believe that regional expertise, deep industry knowledge, and relationship-based service remain essential to agribusiness success, no matter the scale. Congratulations to all parties involved, including the MacLachlan family, whose stewardship of Rawlinna leaves a lasting legacy in Australian agriculture. – The Bailiwick Legal Team Working alongside agribusinesses to grow, transition, and thrive . For assistance with all of your agribusiness needs, contact Bailiwick Legal on 08 9321 5451 or email office@bailiwicklegal.com.au By Matilda Lloyd (Associate) For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.
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