Bust companies revived in ‘phoenix’ deals more likely to fail again, study finds
Summary
A study of more than 1,700 company administrations in England and Wales found that businesses bought back by former owners or directors were more likely to fail again than those bought by unconnected buyers. Connected-party deals also led to lower repayments to unsecured creditors, including HM Revenue and Customs.Key Facts
- The study examined official documents from more than 1,700 administrations that began in 2019.
- By July 2026, 44% of pre-pack deals involving connected buyers had led to another insolvency, compared with 26% of deals involving unconnected buyers.
- Connected buyers deferred payments in 65% of the administrations studied; unconnected buyers did so in 28%.
- Unsecured creditors received repayments in 23% of connected-party deals with deferred payments, averaging 1.58 pence per pound owed.
- For unconnected buyers, unsecured creditors received repayments in 36% of pre-pack administrations, averaging 7.86 pence per pound owed.
- The study’s findings broadly align with a 2014 government review and a 2018 European Union-funded study.
- Turnstone Intelligence conducted the research for the Guardian using AI agents to review company filings.
Read the Full Article
This is a fact-based summary from The Actual News. Click below to read the complete story directly from the original source.
