VIC Suspect phoenix activity

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ifeelscammed

Member
27 April 2021
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0
1
Myself and some other acquaintances invested over $1m in a software business which has been operating for about 7 years. It wasn't profitable, albeit it did turn over $60k/pa in revenue from a hundred or so clients and revenue growth was ~50%/pa, so not a complete failure! The sole Director (owns >50%) has now declared the business insolvent and sold the intellectual property (ie. computer code) to his other business for the debts the company owed (around $250k).

My question is, during the administration process, is there any legal obligations on the director to receive an independent valuation for the business being sold? Selling a business at $0 (or less than zero) and then continuing to operate it from another related entity sounds like fraud to me?!
 

Rod

Lawyer
LawConnect (LawTap) Verified
27 May 2014
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2,894
www.hutchinsonlegal.com.au
Yes, the behaviour is suspect and possibly not legal.

We'd need to see paperwork to assist. Feel free to contact us and ask for Con, see my signature below for details.