Liquidations.

What is a Liquidation?

If a company is insolvent and with no hope of recovery, the appropriate course of action is to liquidate.

A Creditors Voluntary Liquidation (CVL) is the most common means to deal with the company insolvency. The directors can instruct us to act as liquidator.

However if the company remains viable and can be restructured, and the directors have the drive to rescue the business then please consider Administration or CVA which are alternatives.

Here is a step by step guide to a CVL:

1. Directors instruct us.
   
   
2. Typically the company should cease to trade and the staff made redundant. We will inform you what the do's and don'ts are.
   
   
3. The directors convene a meeting of shareholders (members) and also a meeting of creditors at which it will be resolved to liquidate the company.
   
   
4. The liquidator, once appointed, firstly by the members and then the creditors has three primary duties:
   • To realise the company assets.
   • To agree the claims of creditors and distribute (if any) realisations to them in order of priority (secured, preferential then unsecured creditor claims).
   • To investigate the affairs of the company and the conduct of the directors.
     
     
5. For a guide to fees these can be found in the Statement of Insolvency Practice (SIP) No.9 go to http://www.r3.org.uk/publications/?p=80