Insolvency > Provisional Liquidation
In Scotland, a provisional liquidator
can be appointed by either creditor(s), director(s) or the
company (ie the shareholders).
liquidator’s principle duty is to safeguard the company’s
If he has been
appointed by a creditor e.g. as part of a debt collection
exercise, the provisional liquidator will establish whether
the company is solvent and if there are sufficient funds
to make payment of the petitioning creditor’s debt,
together with costs. If settlement of the petitioning creditor’s
claim is made, the appointment of provisional liquidator
can be withdrawn.
of a provisional liquidator can also be the first step of
a full liquidation and is used where a company may continue
to trade under the provisional liquidator’s supervision
in order to explore a sale as a going concern, or if there
is concern that assets may dissipate in the period between
presentation of the liquidation and the appointment of an
liquidator can be appointed almost immediately if it is
a petition presented by the directors and such appointment
can endure for many months if deemed necessary.
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