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Official (or Court) Liquidation

Where the recalcitrant directors of a company refuse either to acknowledge that a company is insolvent or to place the company into some form of insolvency administration, creditors or the other directors may be forced to initiate the action themselves.

When creditor instigated administrations come into being, there is generally some semblance of hostility present, either from management or staff. This calls for a combination of assertiveness and interpersonal skills.

In this regard, the ethos of this firm puts us in good stead in restoring the confidence of employees and suppliers, especially where the business may be carried on.

Court Liquidation
In this type of administration, Liquidators are appointed by the Court in response to a creditor’s petition. The most likely reason for a creditor’s petition is when a company fails to respond adequately to a creditor’s demand for payment of a debt.

Where the Liquidator is appointed by the Court, it is known as an Official Liquidation. Only Registered Official Liquidators may be appointed by the Court.

The Official Liquidator takes possession of the company’s assets, realises them and, after meeting the costs of the liquidation, distributes the proceeds to the creditors.

Other than the method of appointment, the administration of an Official Liquidation is very similar to that of a Creditors’ Voluntary Liquidation.

The Official Liquidator will also conduct investigations into the affairs of the company and the activities of its officers, for the purpose of recovering further assets or discovering any breaches of the Corporations Law.

Payments are made to creditors strictly in order of priority as provided for in the Corporations Law.




 

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