There are many decisions to take and changes to This route is usually the last resort for a company, when it is insolvent and cannot continue trading. It is a route for a Company experiencing financial difficulties whereby the loss making entity can be closed, the Directors be protected from accusations of wrongful trading, and enable the business and, where required the employees to be transferred to a debt free company.
Valuations would have to be undertaken of all assets. The potential purchaser would be required to demonstrate proof of funds and all relative finance must either be in place, or agreed with lenders, and payment terms agreed. The assets may be sold pre Liquidation, but the proceeds would have to reflect the valuation in order to ensure there was no criticism of the Director. A Post liquidation sale does risk the possibility of another party, making an offer for the assets which the Liquidator would have to consider.
With the assistance of an Insolvency Practitioner, Directors would arrange meetings with the Company's members and creditors in order to wind it up and appoint a Liquidator.
Resolutions are put forward at the members' meeting for the Company to be wound-up, together with a further resolution proposing an Insolvency Practitioner to act as Liquidator. These resolutions must be passed and the Insolvency Practitioner's appointment ratified by creditors.
At the meeting of creditors a report would be presented detailing the history of the Company, its financial circumstances and why it has entered into Liquidation. Creditors would be given the opportunity to ask the Directors questions and would then formally vote for the appointment of a Liquidator.
Assets not involved in the pre-pack sale such as book debts, would be realised and proceeds of these, together with the sale of assets, would fund the cost of the Liquidation. Any excess funds would be available as a dividend to creditors in the order of priority.
We understand that you may require guidance and encouragement to help you through these difficult times.
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We
understand that you may require guidance and encouragement
to help you through these difficult times.
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