Reasons for Voluntary liquidation A company may terminate its existence for a wide variety of reasons, apart from insolvency and the inability to pay its debts. A winding up where the company is solvent is a so called “members” or “shareholders” voluntary winding up. Many of the procedures are similar to those for a creditors […]
Overview A creditors’ voluntary (insolvent) liquidation is initiated in the following manner. The directors recommend a proposal to the members (shareholders) to wind up on the basis that the company is unable to pay its debts. The shareholders’ resolution authorises a meeting of the creditors. A statement of affairs is prepared. Fourteen days’ notice must […]
Overview A creditors’ voluntary (insolvent) liquidation is initiated in the following manner. The directors recommend a proposal to the members (shareholders) to wind up on the basis that the company is unable to pay its debts. The shareholders’ resolution authorises a meeting of the creditors. A statement of affairs is prepared. Fourteen days’ notice must […]
Overview A compulsory company liquidation is one that is ordered by a Court. It commences with an application or so called “petition” to Court to wind up the Company. The Official Receiver is appointed Liquidator. Winding up refers to the liquidation of the company’s assets followed by distribution of the proceeds to those entitled. The […]
Overview Company Voluntary Arrangements were introduced in 1986 as an alternative to liquidation where companies experience difficulties in paying their debts. A Company Voluntary Arrangement may allow the company to survive as a going concern and/or prospectively give creditors a better return, due to survival and lower costs. If the arrangement fails, liquidation is likely […]
Reforms Administration has no direct equivalent in Ireland. In some respects, the office is equivalent to that of an examiner. Administration is a procedure which may lead to several outcomes, ranging from a rescue and arrangement with creditors under a Creditors Voluntary Arrangement to eventual liquidation. Administration was first introduced in 1986 and was reformed […]
Methods of Appointment There are two different methods by which an administrator may be appointed. A court order is not necessary in the case of appointments by a qualifying charge holder, by directors or by the company itself. This will cover the majority of cases. The administrator can be appointed by filing certain documentation with […]
Post Appointment Steps An administrator appointed out of Court (e.g. by a floating charge holder) must file notice of appointment with the Court offices. The Court office seals the notice and endorses the time of filing. The administrator must advertise his appointment as soon as reasonably practicable in the London Gazette and such other newspaper […]
Moratorium During administration, a moratorium operates to prevent secured and other creditors from exercising enforcement rights without leave of the administrator or the Court. The purpose is to allow time and space to develop a rescue proposal. The moratorium comes into force once the administration procedure is initiated or once certain papers are filed with […]
Post Approval Once the meeting of creditors has approved the administrator’s proposals, the administrator may establish a committee of creditors to exercise certain functions. The committee consists of between 3 and 5 creditors. The committee may require the administrator to attend before it and to furnish certain information. The administrator must send progress reports to […]