Asset stripping


Produced in partnership with Amelia Clegg of Edmonds Marshall McMahon
Practice notes

Asset stripping


Produced in partnership with Amelia Clegg of Edmonds Marshall McMahon

Practice notes
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What is asset stripping?

Asset stripping is the controversial practice involving the purchase of a company and the deliberate depletion of that company’s assets for personal gain or to increase short-term profits. A subset of asset stripping is ‘phoenixing’, a practice which involves the directors of a company liquidating or abandoning a company in order to avoid its liabilities to creditors and then continue the same business via a new or related company.

Phoenixing

The creation of a phoenix company is a species of asset stripping. A phoenix company is formed when an insolvent company’s business is transferred to a new company, leaving behind the debts and liabilities with the insolvent company. Phoenix companies typically operate in the same business as the previous (now insolvent) company, has the same or largely the same directors as the previous company and in some cases has a similar name to its predecessor.

Re-use of the company name

Under section 216 of the Insolvency Act 1986 (IA 1986), phoenix companies are prohibited from re-using the predecessor company’s registered name

Amelia Clegg
Amelia Clegg

Barrister (Senior Associate), Edmonds Marshall McMahon

Amelia joined Edmonds Marshall McMahon in January 2024 as a Senior Associate. She is a dual qualified English barrister and New York attorney.

Amelia completed her pupillage and took tenancy at a highly ranked barristers’ chambers. At the independent bar, Amelia practised predominantly in all areas of criminal law, appearing in the Crown and Magistrates’ Courts.

Having been admitted to the New York Bar, Amelia spent three years working as a litigation association at an AM100 law firm in New York City, where she gained a wide range of experience in state and federal litigation, with a particular emphasis on commercial litigation and white collar criminal litigation. Her US work included acting as defence counsel in a high profile commercial bribery case and representing a large regulatory sports body with respect to cases brought by former athletes for alleged concussions sustained while playing sports.

In 2022, Amelia’s aptitude for legal writing was recognized at the United States Supreme Court, where she was presented with the American Inns of Court’s Warren E. Burger Award for excellence in legal writing.
Amelia was called to the Bar in 2017, after graduating from the University of Oxford with a Bachelor’s degree in Classics and having completed her GDL and BPTC at the City Law School, London. Amelia was admitted to the New York Bar in 2021, having completed her LLM at the University of Pennsylvania Carey Law School as a Thouron scholar.

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Jurisdiction(s):
United Kingdom
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Key definition:
Liabilities definition
What does Liabilities mean?

A scheme's liabilities are its future benefit payments and expenses. The scheme is in deficit if the current value of its liabilities is more than the assets, or in surplus if the liabilities are less.

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