Understanding Court Liquidation

Understanding Court Liquidation

Introduction

Navigating financial difficulties in business may require a strategic approach to winding up company affairs. 

Court liquidation presents a structured pathway to offering stakeholders a resolution.

What is a court liquidation?

A court liquidation commences with an application to court, often triggered by creditors seeking to recover unpaid debts from a company or where key stakeholders are in dispute. 

The appointment of a liquidator by the court marks the beginning of the winding up, where the company’s assets are realised and distributed to creditors according to legal priorities.

Navigating financial distress: The role of a Court Liquidator

The role of a court appointed liquidator involves:

• Conducting thorough investigations into company affairs and assets.
• Pursuing legal avenues to recover funds owed to the company or pursue claims.
• Adhering to legal requirements in the distribution of funds to creditors.
• Reviewing director conduct.

Subject to certain priorities, available funds are distributed among unsecured creditors proportionally, based upon the value of creditor claims.

Seeking a court ordered winding up or guidance through a court liquidation? Let us assist you

At Wexted Advisors, we specialise in acting as liquidators and guiding businesses through the complexities of liquidation, with expert advice and tailored strategies. 

If you are making an application to wind up a company or your company is facing an application for winding up, contact us for a consultation.