CREDITORS' VOLUNTARY LIQUIDATION
What is a Creditors' Voluntary Liquidation?
A Creditors’ Voluntary Liquidation is where a company takes the decision to call a creditors' meeting as the company is insolvent.
When is a Company Insolvent?
A company is insolvent when it cannot pay its debts as they fall due.
Can a Company appoint a Liquidator itself?
A company can nominate a Liquidator to be appointed but this appointment must be confirmed by the creditors.
Can the Creditors of the Company appoint a Liquidator?
Yes, the creditors can appoint a Liquidator if there is a higher value of monetary claims in support of the creditors' nominee as Liquidator.
Who ultimately appoints the Liquidator in a Creditors' Voluntary Liquidation?
In a Creditors' Voluntary Liquidation, the Liquidator is ultimately appointed to the company by the Creditors of the insolvent company.
What is the process to appoint a Liquidator in a Creditors' Voluntary Liquidation and who can initiate this process?
The process commences with the Directors passing a resolution to make a recommendation to the Members of the Company that a Liquidator be appointed because the company is insolvent and cannot pay it’s debts as they fall due.
The Company then calls both a Members' and Creditors' Meeting giving 10 days' clear notice.
At the Members' meeting, a liquidator may be nominated but this must be confirmed at the Creditors' Meeting.
At the Creditors' Meeting, the Members nominee will either by confirmed by the Creditors or an alternative Liquidator may be appointed.
Who is responsible for the winding up of the Company and realising the assets when a Liquidator has been appointed?
After a Liquidator has been appointed over the Company, the Liquidator is then responsible for realising the assets of the Company on behalf of the creditors and shareholders.
The executive powers of the directors over the Company effectively cease upon the appointment of a liquidator.
Who does the Liquidator report to on their investigation into the Collapse of the Company and the actions of the Directors?
The Liquidator reports to the Director of Corporate Enforcement in accordance with the Company Law Enforcement Act, 2001 on both the reasons for the collapse of the Company and the actions of the Directors.
How kavanaghfennell can help?
If you wish to discuss Creditors' Voluntary Liquidations or corporate restructuring generally, please contact Tom Kavanagh, Ken Fennell or David Van Dessel.
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