Bust companies revived in ‘phoenix’ deals more likely to fail again, study finds

Research conducted by Turnstone Intelligence for The Guardian, analysing 1,738 administrations commenced in England and Wales in 2019, found that 44% of connected-party pre-pack sales resulted in a subsequent insolvency by July 2026, compared with 26% of sales to unconnected buyers, while connected-party transactions were more frequently structured with deferred payments and delivered substantially lower returns to unsecured creditors (1.58p in the pound versus 7.86p), renewing scrutiny of so-called phoenix arrangements, although R3 cautioned that the findings predate regulatory reforms introduced in 2021 to strengthen oversight of connected-party pre-pack sales.

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