The Companies Act 1993 defines a phoenix company as being, in relation to a failed company, a company that at any time before or within five years after the commencement of the liquidation of a failed company, is known by a name that is also a pre-liquidation name of a failed company or is a similar name. When phoenix company arrangements are established in which the new company created bears a similar name, similar assets and similar management structure to a failed company, the purposes of such companies are usually part of a scheme either to circumvent obligations to creditors of the failed company (avoid debts owed) or to mislead the public into believing they are dealing with the same entity as previous, possibly as part of an attempt to mislead creditors of the previous company.
Creditor fury at Crow show. By Rob Maetzig – Taranaki Daily News 29/08/09
A group of businessmen are furious the Taranaki Chamber of Commerce helped allow a debt-ridden man to be involved in a presentation on a major commercial development project for New Plymouth.
David Crow is the director of Buildwise Ltd, an Inglewood building company that has been placed into liquidation owing several hundred thousand dollars to at least 57 creditors, most from Taranaki. On Wednesday night he fronted up with his brother Steve at a Taranaki Chamber of Commerce function to give a presentation on multi-million dollar development plans for the New Plymouth RSA property.
The pair bought the premises for $1.9 million in July last year and are planning a $20 million commercial development called the Te Ara Complex. This has infuriated several business owners who are owed large amounts of money by Buildwise.