Restructuring, Turnaround and Insolvency Specialists

Official Liquidations

A company is placed into official liquidation after an interested party, usually a creditor, makes a court application to have the company wound up because it cannot pay its debt (or debts) or its assets are at risk. An official liquidation allows the company’s assets to be secured and realised in an orderly manner. It also allows for the company’s affairs and its failure to be investigated and, if possible, the any proceeds from the sale of its assets to be distributed to its creditors.

An official liquidation is generally commenced by the following process:

  • A creditor issues a company with a Creditor’s Statutory Demand for payment of an outstanding debt.
  • Within 21 days of receiving the Creditor’s Statutory Demand the company must either pay the debt or apply to a court for the demand to be set aside.
  • If the company does not pay the debt or have the demand successfully set aside, the creditor can apply to the court to have the company wound up.
  • The court will then set a date for the winding-up application to be heard and the creditor must then serve upon the company a relevant copy of the application.
  • On the day of the hearing, the court will decide whether the appointment of the liquidator should proceed with the company being placed into liquidation.

The Brooke Bird Partners are able to take on such appointments on behalf of creditors who are wishing to enforce their statutory rights. Please contact us should you wish to discuss how we can assist this process.

Provisional Liquidations

After an application to wind up a company is filed, the appointment of a provisional liquidation can occur. This is when a liquidator is appointed by the court in an interim capacity until the winding-up application is heard in court.

A provisional liquidator is generally appointed to act as “caretaker” over a company under any of the following circumstances:

  • When there is a risk the company’s assets could be lost or made unavailable before the winding up application is heard in court.
  • When company shareholders believe the directors are not discharging their duties properly, or are acting recklessly or in their own interests.
  • When there is a need to protect the company’s assets or its business.

Click HERE for relevant ASIC information sheets.

 

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