ASIC has said it will target business owners who try to dodge their creditors by “illegal phoenix activity”.
A director has received three serious punishments after being caught engaging in phoenix activity.
Ms Amy Timko, of Spreyton, Tasmania, has been:
- Convicted of two counts of fraudulent conduct under the Corporations Act 2001
- Sentenced to two months’ imprisonment (wholly suspended)
- Disqualified from managing corporations for five years
Ms Timko, who operated several Noodle Box franchises in Tasmania and was the sole director of A Twisted Little Company, was the subject of an ASIC investigation.
ASIC alleged that Ms Timko:
- Sold the company’s plant and equipment for $30,000 to a second company
- Transferred the plant and equipment to the second company without receiving the $30,000
- Placed the company in liquidation soon after the plant and equipment was transferred to the second company
- Reassigned a number of Noodle Box leases to the second company (contrary to an agreement the company signed with Noodle Box Franchising Australia)
“The effect of the transfer of the plant and equipment and reassignment of the leases meant that creditors of the company may have been denied access to the company’s assets,” according to ASIC.