Federal Court exposes phoenixing scheme and holds de facto director to account

Michelle Dean, Bridget Rumball and Zoe Roufail of Corrs highlight a Federal Court decision holding a woman personally liable as a de facto director for insolvent trading and breaches of directors’ duties arising from a phoenixing scheme, with the Court finding that her control over the company’s finances, dealings with advisers and creditors and broader management role outweighed her lack of formal appointment, while also confirming that failures to keep proper books and records can support a presumption of insolvency from incorporation.

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