Corporate Insolvency   >  Court Liquidation

An insolvent liquidation can arise at the instance of a creditor(s), the company, director(s) or shareholders because the company is unable to pay its debts as they fall due.

A liquidation petition is presented to the relevant court which has jurisdiction and, if there are no objections within the statutory period, a winding order is pronounced. At such time, an interim liquidator is appointed.

The interim liquidator convenes a meeting of creditors and at the meeting, a liquidator is elected. Such election is based upon votes in accordance with the value of each creditor claim represented at the meeting. If there is sufficient interest, a liquidation committee can be elected to assist the liquidator in discharging his duties. The committee consists of three, four or five creditor representatives.

The liquidator is responsible for realising the company’s assets and distributing the net proceeds to creditors in accordance with their legal ranking.

 Return to Top