Creditors’ Voluntary Liquidation
The purpose of a Creditors’ Voluntary Liquidation is to have a Liquidator take control of the affairs of an insolvent company so that it may be wound up in an orderly fashion for the benefit of stakeholders.
The appointment process initially involves a meeting of directors, followed by an extraordinary meeting of members, where a resolution is passed to appoint a Liquidator. This can happen quite quickly where Consent to Short Notice is agreed to by at least 95% of members.
The Liquidator’s role is to:
- Realise the assets of the company
- Make inquiries and conduct investigations into the past affairs of the company in order to ascertain the causes of its demise, pursue recoveries in relation to insolvent transactions and insolvent trading offences, and report findings to the Australian Securities & Investments Commission
- After the costs of the liquidation, and subject to the rights of any secured creditor/s, pay dividends to the creditors of the company, first to priority creditors (including employees) and then to unsecured creditors
For more information, see the following information links prepared by the Australian Securities & Investments Commission:
To speak with us further regrading whether a Creditors’ Voluntary Liquidation may be appropriate in your situation, please contact us on 08 9215 7900 for a cost and obligation free consultation.