Articles and Publications
Winding Up is Not the End of the Road
19/Aug/2004
If you are owed money by a company that has gone bust that does not necessarily mean that you will not be paid. Many liquidations do result in the payment of a dividend if not payment in full, and this is not just from the sale of the assets of the company but from potential claims which can be brought by the liquidator.
For example, if the directors of the company have misappropriated the company's funds or have traded wrongfully the liquidator can bring a claim against the directors for an order requiring the directors to compensate the losses. Where the directors have preferred one creditor over and above the general body of creditors the liquidator can seek to recover that payment. These are just two examples out of a wide range of remedies available to the liquidator.
As a creditor of the company you will be notified if a meeting of creditors is to be held. You will receive a proof of debt form which you should complete and return before the meeting setting out the monies due to you and return before the meeting.
When the meeting is held the directors of the company can be questioned by those attending the meeting about the failure of the company. This scrutiny can often reveal the existence of claims against the directors, associated companies and/or other creditors. It is important that if you have any information regarding the company and/or the conduct of the directors that you provide the information either before or at the meeting. If the company has any assets which have been concealed or there are matters which require further investigation, an insolvency practitioner will be appointed liquidator at the meeting. It is the liquidator's role to get in the assets of the company, pursue such claims and distribute the monies realised to the creditors.
The extent to which the liquidator can undertake the investigation and pursue claims is largely dictated by the current funds available, but there are liquidators who are willing to pursue speculative claims for the benefit of the creditors even if there are no funds in the pot.
It is important that the right liquidator is appointed for the job.
You can influence his appointment by attending the meeting and using your vote. The appointment is by a simple majority of the votes cast. Voting is done by way of value, based on the individual claims. You will only be entitled to use your vote at the meeting if you have completed and returned the proof of debt form in advance.
You can instruct an agent to attend the meeting on your behalf by giving him authority to vote. To do this you need to complete the proxy form which will have been sent to you with the proof of debt form.
So if you are owed money by a company that has gone bust, pick up the phone and give us a call. We can usually arrange attendance at the meeting anywhere in the country on your behalf free of charge. Don't waste your vote. This is even more important in the case of a company which is placed into voluntary liquidation because the nominated liquidator will be of the director's own choosing.
It does not matter how small your claim is. Make your vote count.
For example, if the directors of the company have misappropriated the company's funds or have traded wrongfully the liquidator can bring a claim against the directors for an order requiring the directors to compensate the losses. Where the directors have preferred one creditor over and above the general body of creditors the liquidator can seek to recover that payment. These are just two examples out of a wide range of remedies available to the liquidator.
As a creditor of the company you will be notified if a meeting of creditors is to be held. You will receive a proof of debt form which you should complete and return before the meeting setting out the monies due to you and return before the meeting.
When the meeting is held the directors of the company can be questioned by those attending the meeting about the failure of the company. This scrutiny can often reveal the existence of claims against the directors, associated companies and/or other creditors. It is important that if you have any information regarding the company and/or the conduct of the directors that you provide the information either before or at the meeting. If the company has any assets which have been concealed or there are matters which require further investigation, an insolvency practitioner will be appointed liquidator at the meeting. It is the liquidator's role to get in the assets of the company, pursue such claims and distribute the monies realised to the creditors.
The extent to which the liquidator can undertake the investigation and pursue claims is largely dictated by the current funds available, but there are liquidators who are willing to pursue speculative claims for the benefit of the creditors even if there are no funds in the pot.
It is important that the right liquidator is appointed for the job.
You can influence his appointment by attending the meeting and using your vote. The appointment is by a simple majority of the votes cast. Voting is done by way of value, based on the individual claims. You will only be entitled to use your vote at the meeting if you have completed and returned the proof of debt form in advance.
You can instruct an agent to attend the meeting on your behalf by giving him authority to vote. To do this you need to complete the proxy form which will have been sent to you with the proof of debt form.
So if you are owed money by a company that has gone bust, pick up the phone and give us a call. We can usually arrange attendance at the meeting anywhere in the country on your behalf free of charge. Don't waste your vote. This is even more important in the case of a company which is placed into voluntary liquidation because the nominated liquidator will be of the director's own choosing.
It does not matter how small your claim is. Make your vote count.
