Adopting a “Court Liquidation” solution (Liquidation & Provisional Liquidation)

Home > Adopting a “Court Liquidation” solution (Liquidation & Provisional Liquidation)

Who’d be interested in liquidation & provisional liquidation?

You would be a creditor and are owed money by your debtor and the money is proving difficult to collect.

The debtor is a company not an individual.

Your debt would be unsecured and there is no dispute that the money is owed.

The amount owed to you is more than $2,000.

How does liquidation & provisional liquidation help?

Liquidation and Provisional Liquidation has the affect of taking the assets and control of the company away from the directors who are not cooperating into the hands of an independent third party called a liquidator.

The liquidator is a court appointed officer and responsible to the court and creditors to collect and sell the assets and distribute the proceeds in accordance with the law to creditors.

Often the threat of liquidation will be sufficient to coerce the payment out of the debtor.

Provisional Liquidation is an interim step where you the creditor, may have reason to believe that the assets of the company may be at risk so that once you have notice of this and you have commenced the winding up process you can make application for a court appointed provisional liquidator to preserve the position of the debtor company until the court has had the opportunity to consider the winding up petition.

What you should do now

To place a company in liquidation or wind it up costs in terms of legal fees. So the first thing that should be ascertained is whether if nothing else there will be sufficient assets in the debtor company to at least cover the legal costs which generally range from about $2,500 to $5,000 depending on the difficulties experienced in the process. The reason is that the costs of winding up the company ranks first out of the assets of the company. The significance for you as a creditor is that if nothing else you are no worse off if there are not enough assets to pay your debt.

Next you should compile all the backup documentation to prove your claim and take it to you solicitor. If you do not have a regular solicitor we can refer you to someone with experience in this area.

Part of the winding up process will be the obtaining consent to act from a registered Official Liquidator, which needs to be filed with court. We are able to act in the capacity as a court appointed liquidator.

Winding up Checklist and Guide

The following links are to web pages contained on the Australian Federal Court website and have been added to our website for your convenience.

Corporation – Winding Up Checklist

Corporation – Winding Up Guide

Why Clout & Associates?

We are business recovery and insolvency specialists. This is our main facet of our practice and there is vast experience within our ranks.

We are one of very few court appointed liquidators in the north of the state.

With offices located in Coffs Harbour and Kingscliff we operate in the region of your business so that we can move quickly to take possession and not cost in terms of travel costs and time.

For target debtors outside our region we have long associations with trusted practitioners who can take possession quickly for us when the need arises.

Our fees have been adjusted to cater for the size of businesses in the regions and the lower overhead structure we all operate under.

Being in your area means you get answers and will not be fobbed off.

To discuss your options click here for our contact details.