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Phoenixing with a difference, is it legal and ethical?

Phoenixing with a difference, is it legal and...

I'm in need of some advice here please. A potential client has approached me, I was in the process of taking him on when I discovered that he has some new plans for the business. Mr D is the director and 25% shareholder in 'Company Advert Great Ltd' which trades as 'Company Adverts'. Mr D wants to buy the 75% shareholder out of Company Advert Ltd, close this company and then open a new company. 

The new company would be opened with Mr D's father and would be called 'Company Adverts Good Ltd', also trading as 'Company Adverts'. 

The names are made up but basically they are just adding a letter and changing a word to form the new company, the trading name would not change.

I asked the client why he needed to form a new company if he was buying the 75% Shareholder out and he told me that he just wanted a fresh start. 

Now the accounts for 2014/15 look healthy enough however there isn't a recent set of accounts so I'm not sure what state the company is in which Mr D wants to close as at the end of this month, assuming the debts are paid I'm still unsure about the new company being so similar to the old and trading under the same name... am I over thinking this or should I be running in the opposite direction?

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