Company Liquidation

What happens during the liquidation?

The goal is for the company’s available funds to be distributed in a fair and orderly manner. The liquidator is responsible for selling the company’s assets and distributing the proceeds in the prescribed manner. The costs and expenses of the liquidator are paid first, after which any excess funds (if available) are paid to the company’s priority creditors and then any ordinary unsecured creditor claims.

The liquidator will also investigate the company’s affairs and ensure that all of its actions were legitimate and fair, in particular, payments to its creditors. If there is evidence that any creditor received a payment that was in preference to the other creditors, the liquidator can apply to the Court to have that transaction reversed so that the funds can be distributed fairly. This also applies if it is found that a director entered into an uncommercial or unfair director related transaction.

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