What is liquidation?
A range of legal, financial & business factors might mean that liquidation is necessary
When a company is placed into liquidation, this is generally because the company is insolvent and because the company has no realistic chance of resolving its financial distress. This is usually because the financial situation of the business is dire and there is no prospect of restructuring or salvaging the business. A liquidation should be a last resort, and there are opportunities to avoid such a consequence. In this case, a registered liquidator will be appointed.
A liquidator is an officer of the court. The primary duty of the liquidator is to act in the interests of the creditors. The liquidator does not act for or represent directors of the company. The liquidator takes over the affairs and operations of the company, conducts investigations and take steps to recover voidable transactions entered into by directors during the relevant period of insolvency.
The liquidator will investigate the conduct of directors, sell assets of the business, or the business itself and make distributions to secured and unsecured creditors.
Sometimes, liquidators may conduct public examinations of directors in court and may commence legal proceedings against directors for allegations of breaches of directors duties, including insolvent trading. Directors should get urgent advice from our firm in this situation.
The key to avoiding liquidation is to obtain regular and early assessments of your financial position through a forensic accountant, insolvency practitioner and to retain our firm to give you legal advice on your obligations as directors, and to implement any restructuring plan.
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We help you understand the essentials.
Liquidation
When a company is placed into liquidation, this is generally occurs because the company is insolvent and because the company has no realistic chance of resolving its financial distress and becomes necessary to avoid additional financial and legal risks. This is usually because the financial situation of the business is dire and there is no prospect of restructuring or salvaging the business. A liquidation should be a last resort, and there are opportunities to avoid such a consequence. Sometimes, your creditors will have the power to liquidate your company.
Insolvent Trading
if your company incurs a new debt at a time where the company is insolvent, or where it reasonable to suspect that your company is insolvent or could become insolvent because, you and other directors could be engaged in insolvent trading. Learn about what this means and how to avoid this.
Voluntary Administration
Sometimes, risks of insolvency and liquidation might be avoided early via a corporate restructure or voluntary administration. A corporate restructure can involve making changes to the legal and operational set up of your company. For example, this might include changes to ownership, management, leadership, shareholders, operations & policy, employee structures & roles, among other things. Voluntary administration involves the appointment of a voluntary administrator with the view to formally restructuring of or the sale of the business. Learn more.
We have a rich understanding of what works, and, more importantly, what doesn’t
Not all advice in bankruptcy and insolvency is equal, and not all strategies are viable.
When your business or future is on the line, it can be hard to know who you can rely on for help. Cost also plays a part. We know that, sometimes, it can be hard to know who to trust. That is why we are open, clear and straight forward with you when it comes to what works, and what doesn’t work.
Our experience is important because we have a deep understanding of your challenges. We know, and are qualified to give you advice on, how bankruptcy and insolvency laws operate, what strategies actually work and how these can effect your planning. We will work with you to produce a plan which is commercially and legally viable. We do not gamble with your business, or your future.