Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020 (6 of 2020)
Schedule 1 Phoenixing offences and other rules about property transfers to defeat creditors
Part 1 Main amendments of the Corporations Act 2001
Corporations Act 2001
18 After section 588FDA
588FDB Creditor-defeating disposition
(1) A disposition of property of a company is a creditor-defeating disposition if:
(a) the consideration payable to the company for the disposition was less than the lesser of the following at the time the relevant agreement (as defined in section 9) for the disposition was made or, if there was no such agreement, at the time of the disposition:
(i) the market value of the property;
(ii) the best price that was reasonably obtainable for the property, having regard to the circumstances existing at that time; and
(b) the disposition has the effect of:
(i) preventing the property from becoming available for the benefit of the company's creditors in the winding-up of the company; or
(ii) hindering, or significantly delaying, the process of making the property available for the benefit of the company's creditors in the winding-up of the company.
Extensions of concept of disposition
(2) For the purposes of this section and provisions of this Act that refer to a creditor-defeating disposition, if a company does something that results in another person becoming the owner of property that did not previously exist, the company is taken to have made a disposition of the property.
(3) For the purposes of this section and provisions of this Act that refer to a creditor-defeating disposition, if:
(a) a company makes a disposition of property to another person; and
(b) the other person gives some or all of the consideration for the disposition to a person (the third party ) other than the company;
the company is taken to have made a disposition of the property constituting so much of the consideration as was given to the third party.
Subdivision B - Voidable transactions