Insolvency Definitions

Note - Some Terms apply strictly under New Zealand Law and do not necessarily apply to other Legal Jurisdictions - See Disclaimer

Term	Definition

Action	A proceeding in a Court of law where one person seeks a Court Order for the enforcement of that person's or company's rights.

Address for Service	Required by companies registered under the Companies Act 1993. It is the address at which legal documents must be served at.

Adjournment	.

Affidavit	A statement by a person in which the person swears that to the best of his or her knowledge, the facts in question are true. An affidavit is sworn before a Notary, Justice of the Peace, Lawyer or some other judicial officer who can administer oaths.

Agent	A person who has received, usually by appointment, the power to act on behalf of another.

Application	The act of making a request usually of the Court. For example, an application to have a company placed in liquidation.

Appointment	The act of designating, or the acquisition of some, responsibility or position. For example, the Court or the shareholders can appoint a person(s) to act as Liquidator of a company.

Arbitration	A formal dispute resolution mechanism, whereby an independent neutral third party is appointed to hear and consider the merits of the dispute, and who renders a final and binding decision called an award. The procedure is governed by the Arbitration Act 1996.

Arm's Length	The act of dealing with a person who is not related but an independent third party.

Arrears	The amount of money by which a contract or obligation is in default.

Asset	A thing, chattel, resource or item or piece of property owned or controlled by a person or company. An asset can be intangible (i.e. cannot be touched) such as goodwill, intellectual property rights.

Assign	To give or to transfer an asset (or liability) to another.

Bailiff	A person who is appointed under law to act or assist any other person to repossess, cease or distrain pursuant to conditions set out in various Acts.

Bankrupt	A bankrupt is an individual or partnership against whom a bankruptcy order has been made by the Court following an act of bankruptcy. The order signifies that the individual is unable to pay their debts and deprives them of their assets apart from a small sum, tools of trade, etc. The assets are then realised for distribution among the creditors by the Official Assignee.

Beneficiary	The person who is in receipt, or will be in receipt, of some asset, thing, or thing of value. For example, a person can make a will naming someone, usually their spouse or children, as beneficiary of their estate.

Bill of Exchange	A legal document, such as a cheque, where one person in writing specifies that a third party will pay a person a specific sum of money at a specific time, or upon demand.

Bill of Lading	A document received by a transportation company acknowledging that it has received certain goods and, for the purpose of transportation, serves as title to that property.

Bona Fide	A Latin term meaning an act was done honestly and in good faith.

Case Law	That body of Court decisions that act as precedents in the interpretation of various Acts. In some cases, the rule is not in any legislation or Act of Parliament, but can be found as a principle of law established by a judge in some recorded case.

Caveat	A legal notice lodged with the appropriate Court or authority to prevent further steps being taken in certain processes e.g. a purchaser of land may lodge a caveat over the title to prevent the land from being transferred to any other party.

Charge	A charge over the company’s assets will be in the form of either a Debenture, Mortgage or chattel security and must be registered within 30 days if executed in New Zealand and 3 months if executed outside new Zealand. Exceptions are Hire Purchase on a motor vehicle and negotiable instruments to secure payment of book debts. Charges are void against a Liquidator and creditors if not registered.

Chattel	Assets that are movable and not attached to land or real property.

Chattel Mortgage	An interest that is given by one person in, say, a piece of property such as a piano to another person to secure a debt.

Chose In Action	The right of property in intangible things which are incapable of being taken into physical possession, but that are enforceable through legal or Court action, such as debts, insurance claims, shares in a company, pensions and salaries.

Claim Provable In Bankruptcy	Any claim or liability that is provable in a proceeding under the Insolvency Act.

Collateral	Assets that are pledged by a borrower and forfeited if the terms of lending are not followed.

Company Guarantee	A company guarantee is where a company guarantees the debt of another company or person. If the company is a member of a group, a debenture creating a cross guarantee under the debenture is frequently given. This effectively creates a charge over another company’s debts and ranks ahead of its own unsecured creditors (but the company itself receives a cross guarantee of indebtedness from other companies in the group).

Completion Date	That date on which the transfer of title is to be made. Used in Agreements for Sale & purchase.

Compromises	The firm provides service in respect of Compromises with creditors and acts as Compromise Manager.

Compromises with Creditors	A voluntary arrangement with creditors following a formal proposal setting out the term and effects of the proposal and calling a meeting of creditors to vote on the proposal. The compromise requires a 75% in value and a majority in number support of creditors voting.

Consideration	Refers to money or something of value in exchange for acquiring some goods or services or other interest in an asset.

Consign	To hand over or give possession of an asset to someone, but not pass legal ownership.

Contingency Fee	That fee which a person is entitled to per an agreement upon the successful completion of some action. For example, a lawyer can take on an action for, say, 25% of the proceeds which he would only be entitled to if the action is successful. Currently there is some controversy in New Zealand over whether it is ethical for lawyers to undertake work on this basis.

Contract	An agreement between parties, where each party has obligations. In order to be valid, a contract must have three basic elements; an offer, an acceptance of that offer and consideration.

Conveyance	That act which transfers property from one person to another.

Court Liquidations	The partners are prepared to accept appointment as Court Appointed Liquidators. Where creditors or directors wish for an urgent appointment they will act as Interim Liquidators.

Creditor	That person who has a claim, preferred, secured or unsecured. It includes contingent claims and claims for an uncertain amount.

Creditors Claim Forms	These now replace Proofs of Debt. Claims against a company in liquidation can be made for present or future, certain or contingent debt and can be an ascertained debt or a liability for damages. Unsecured creditors’ claims must be in the prescribed form and contain full particulars and identify any documents that evidence or substantiate the claim. Unlike Proofs of Debt creditors claims do not have to be signed in front of a JP, High Court Solicitor or Liquidator. The penalty for making a False Claim is imprisonment not exceeding 5 years or fine not exceeding $200,000.

Crystallization	That point in time where a contract or agreement triggers certain clauses in that contract. For example, when a debentureholder appoints a receiver pursuant to its debenture, all the assets of the company in question, that are not secured by other creditors, are captured by that debenture.

Damages	Cash compensation awarded by a Court to offset losses or suffering caused by another person's negligence or fault.

Debenture	A debenture is a form of mortgage over the assets of a company. These can be either or both fixed and floating charges. It normally includes a provision for an appointment of receivers or receivers and managers. A debenture must be registered at the Registrar within 30 days of creation for it not to be regarded as voidable).

Debtor	A person who owes money, goods or services to another.

Declaration of Solvency	A Declaration of Solvency was previously required for a members’ liquidation, pursuant to the now repealed Companies Act 1955. This terminology is redundant.

Default	Failure to pay or otherwise perform obligations under a contract.

Demand	See Statutory Demand.

Discharge	To cancel or relieve a person of an obligation or responsibility.

Disclaim	The act of denying, refusing, renouncing or repudiating an interest that one might have in some item.

Dissolution	The act of ending, terminating or winding up of a company or state of affairs (see Removal from Register).

Distraint	The right that a landlord has to seize the property of a tenant on the premises being leased and sell that property for payment of rent arrears. The procedure for distraining is set out in the Distress and Replevin Act 1908.

Easement	The right held by one person to make use of the land held by another person for a limited interest. For example, a utility may have an easement over a piece of real property which allows that utility to have, for example, electrical power lines running over that property.

Effective Date	The date an agreement comes into force. Also applies to legislation.

Encumbrances	Those charges or the security that attaches to any kind of property. For example, if there is a mortgage on a piece of property, then the property is said to be encumbered by that mortgage.

Equity	This refers to the excess that the value of a piece of property has after accounting for any charges or encumbrances against that piece of property.

Escrow	The holding of money or a written document, such as shares or a deed, until certain conditions are met by the two contracted parties.

Essential Services	Essential Services includes retail supply of gas, electricity, water and telecommunications services. Suppliers of essential services cannot refuse supply to a Liquidator or receiver on account of debts outstanding prior to appointment.

Ex Parte	Latin - for one party only. Ex parte refers to those legal proceedings where one of the parties has not received notice and therefore is neither present nor represented at the Court Hearing.

Examination For Discovery	A legal proceeding whereby one party examines the party on the other side, usually under oath for the purpose of confirming facts and perhaps obtaining admissions from that other party. The Liquidator has the power to examine directors, staff, creditors, bank managers, accountants, solicitors and any other person who has knowledge of the affairs of the company. This power is given to the Liquidator under Section 261 of the Companies Act 1993.

Fair Market Value	That hypothetical value of a piece of property, given a willing purchaser and a willing vendor, and a reasonable amount of time for the property to be exposed to sale.

Fee Simple	Title to ownership without restriction or limitation. For example ownership of land in fee simple means the land is owned outright as compared to a person who leased land.

Fiduciary	Sometimes considered to be synonymous with the word Trustee. A fiduciary holds certain rights which he or she must exercise for the benefit of the beneficiary. Directors are regarded as being in a fiduciary relationship with their company. Employees are also regarded as being in a fiduciary relationship with their employer.

Fixed Charge	A fixed charge is a form of security granted over specific assets preventing the debtor dealing with those assets without the consent of the secured creditor. It gives the secured creditor a first claim on the proceeds of sale, and the creditor can usually appoint a receiver to realise the assets in the event of a default. The most common forms of fixed charges are mortgages over land or building or chattel securities (see also Charge and Secured Creditor).

Fixtures	Those assets that are attached to or are part of a building, or are fixed to land.

Floating Charge	A floating charge is a form of security granted to a creditor over general assets of a company which may change from time to time in the normal course of business (e.g. inventories). The company can continue to use the assets in its business until an event of default occurs and the charge crystallizes on the appointment of a receiver. If this happens, the secured creditor can realise the assets to recover their debt by appointing a receiver and obtaining the net proceeds of sale subject to the prior claim of preferential creditors (see Debenture, and Charge, and Secured Creditor).

Foreclosure	That action that a lender will take to repossess and sell a piece of property for defaults in mortgage payments.

Fraudulent Trading	Term not now used. See Reckless Trading.

Garnishee	The seizure of earnings, receivables belonging to a debtor that are in the hands of a third party. For example, a debtor may obtain a Garnishee Order which requires $100 of weekly wages be deducted by the employer to be paid over to the benefit of the debtor.

Goodwill	That value attributed to a business that is not tangible, but arises from the reputation, expertise, service or some other intangible that attaches to the business, its name, logo or know-how, and makes it have more worth than just the value of its tangible assets.

Guarantor	A person who promises in writing to pay a certain debt of a debtor if the debtor defaults.

In Specie	A Latin term meaning in kind, or in its own form. For example, a debt may be paid in specie by assigning an asset of equivalent value rather than paying out.

Indemnity	The act of one party protecting or guaranteeing protection, or freedom from liability, of a third party for actions of that party.

Individuals	The firm will examine the alternatives to bankruptcies, and advises and acts as Trustee for Insolvents pursuant to Part XV of the Insolvency Act.

Insolvent	A person or entity that is not able to pay debts generally as they become due. Refer to the Insolvency Test and Questionnaire part of our website.

Insolvent Liquidation	Insolvent liquidations cover all liquidation apart from Solvent Liquidations. In an insolvent liquidation the company is unable to pay its debts. A Liquidator can be appointed by the Court, or the shareholders of the company, or the directors if provided for in the Constitution. The Official Assignee can only be appointed by the Court. The creditors have the right at a creditors meeting to replace either the Official Assignee or the shareholders appointed Liquidator with a Liquidator of their own choice provided the nominee satisfies the qualifications of a Liquidator.

Interest on Claims	Interest is payable on creditors claim up to the date of liquidation at the contracted rate (if there was no contractual agreement entitling a creditor to charge interest, they cannot claim it). Thereafter interest is payable on all admitted claims at the Judicature Act 1908 rate dependent on the extent assets are available to meet such interest after creditors admitted claims have been met in full.

Interim Dividend/Distribution	A dividend paid to creditors before the liquidation is finalized.

Interim Liquidator	A person appointed by the Court to preserve the assets of a company during that time between the application to the Court to place a company in liquidation and the date of the Court Hearing.

Interim Order	A temporary Court Order intended to be of limited duration, usually until the Court has had an opportunity of hearing the full case and the opportunity of making a Final Order.

Investigations	The firm prepares independent reports for banks and other institutions on the financial affairs of the companies and restructuring proposals.

Joint and Several Liability	The liability of more than one person for which each person may be sued for the entire amount of the damages.

Judgement	A formal decision, sentence or Order of a Court.

Leasehold Improvements	Those assets which are attached to a building and cannot be removed from any property being leased.

Legislation	The main legislation covering insolvency in New Zealand is: The Companies Act 1993, Insolvency Act 1967, Corporations (Investigation and Management) Act 1989, Insolvency Regulations 1970, Insolvency Rules 1970, Receiverships Act 1993, The Companies Act 1993 Regulations 1994, The Companies (Fees) Order 1994, The High Court Fees Regulations 1992, The High Court Amendment Rules 1994

Liability	Any legal obligation for which a person is responsible.

Lien	A lien is a right of possession over goods or property belonging to another, with a right to retain possession until debts due to the possessor are paid. It may be in the form of an equitable charge in favour of a creditor who may sell the property this charged. A lien over documents is restricted as against a Liquidator although in certain cases $500 may rank as a preferential creditor.

Liquidation	Liquidation commences on the appointment of a Liquidator and is the process whereby a company has its assets realised by a Liquidator to satisfy its liabilities and to repay its shareholders. The term “winding up” was previously used. For more details refer to the Insolvency Definitions part of this website.

Liquidation Committee	The liquidation committee (previously committee of inspection) may be appointed by the creditors or shareholders at any time in the liquidation. The powers include calling for reports from the Liquidator, calling a meeting of creditors or shareholders, making application to the Court for Court supervision of the Liquidator or for orders to enforce the Liquidator’s duties, or assist the Liquidator in the conduct of the liquidation. The committee should be no less than three and may consist of creditors, shareholders or their representatives.

Liquidation Surplus Account	Unclaimed moneys arising from liquidations where the Official Assignee is appointed can after a period be paid into the Liquidation Surplus Account. This account can be used to fund proceedings taken by the Official Assignee or other Liquidators.

Liquidator	A Liquidator is the person (or persons) responsible for dealing with the liquidation of a company. The Liquidator is appointed by the shareholders, the directors if the constitution permits, or the Court. A Liquidator must be an actual person and cannot be a company or some other body corporate. The Companies Act 1993 lists qualifications which restricts certain persons from acting (see Section 280).

Liquidator’s Reports	The Liquidator must prepare a report to all creditors within 5 working days of appointment. For Court liquidations the time is 25 working days. The report should include a Statement Of Affairs, proposal for conducting the liquidation and if practical, expected completion date. Also, a notice of calling a meeting of creditors or the reasons why such a meeting should not be called. Further reports on the conduct of the liquidation are due every six months. A final report is required at the completion of the liquidation.

Litigation	A dispute that results in formal Court action or a law suit.

Mediation	An alternate dispute mechanism whereby the mediator acts as a facilitator assisting the parties in coming to a mutually agreed settlement. The mediator has no power to make a binding order if the parties cannot agree.

Meeting of Creditors and Members/Shareholders	The procedures for calling and conducting creditors and members meetings for companies is set down in the Fifth Schedule of the Companies Act 1993. These meetings can now be held by assembly, or by audio or audio-visual communications, or by postal ballot. A Liquidator has some discretion in calling a meeting of creditors but this can be appealed by a creditor.

Members	The members of the company are its shareholders.

Members Voluntary Liquidation	Now called Solvent Liquidation.

Mortgage	An interest given on real property to guarantee the payment of a debt or execution of some action.

Mortgagee	The person in whose favour a mortgage is issued; for example a bank.

Mortgagor	The person issuing the mortgage; for example a company or individual (see also Grantor).

Official Assignee	An Official Assignee is an employee of the Ministry of Economic Development who is appointed under the Insolvency Act 1967. They deal with the administration of Liquidations and Bankruptcies either as a Liquidator of Official Assignee.

Onerous Property	The term “onerous property” in the context of a Liquidation or Bankruptcy applies to unprofitable contracts and to property that is unsaleable or not easily saleable or that may give rise to a continuing liability. Such property can be disclaimed by a Liquidator or Official Assignee but not by a Receiver or Manager.

Pari Passu	Latin - equally and without preference. This term is often used in bankruptcy or Liquidation proceedings where creditors are said to be paid pari passu, or each creditor is paid pro rata in accordance with the amount of his claim.

Personal Guarantee	A personal guarantee is where one party guarantees payment of another party’s debt. The most common forms are directors’ guarantees to banks to meet payment if the company fails to pay moneys owed under a mortgage or debenture. The other common guarantees are for leases or trade accounts.

Petition	The application made under the Insolvency Act for the Court to hand down an Order stating the person is in bankruptcy.

Plaintiff	A person who initiates a legal action in Court. That person may also be referred to as the Claimant, Petitioner or Applicant. The other person who is being sued is generally called the Defendant or Respondent.

Possession Date	That time that is mutually agreed that the person buying property will take ownership, control or possession of it.

PPSA - Personal Property Security Act	New legislation enacted but not yet in force. It will require a creditor to register any interest that he has in the property of another before the security is valid. The Registry can therefore be used if an institution is considering taking security on various assets, or if a person is contemplating purchasing an item such as a vehicle and wants to ensure that he purchases it free and clear of any encumbrances.

Preference	A preference is a transaction that has the effect of putting a creditor of a company (or an Individual) in a better position than would have been the case in the event of a subsequent Liquidation or Bankruptcy. In certain circumstances a preference can be challenged by a Liquidator or an Official Assignee (see voidable transactions and voidable securities).

Preferential Creditors	Those creditors that rank ahead of ordinary or unsecured creditors, as defined in the Seventh Schedule of the Companies Act 1993. Preferred creditors are typically employees for wages and holiday pay, Inland Revenue Department for GST and PAYE only.

Prima Facie	Latin - on the face of it or at first sight.

Pro Bono	Latin - provided for free.

Pro Rata	Latin - to divide proportionately amongst people having a claim.

Promissory Note	An unconditional, written, signed promise to pay a certain amount of money on demand or at a certain date defined in the future.

Proofs of Debt	Now replaced by Creditors Claims.

Proper Accounting Records	The requirements are set out in both the Companies Act 1993 and the Financial Reporting Act 1993. If a company does not maintain proper accounting records, then on the application of the Liquidator the Court may declare the directors personally liable for the debts of the insolvent company. However, the Liquidator must first prove that the lack of proper accounting records caused the failure of the company.

Proposal – Individual (referred to as Part XV’s)	A voluntary arrangement for an individual is a procedure whereby a proposal, usually involving delayed or reduced payments of debt, is put forward to creditors under Part XV of the Insolvency Act 1967. Such a proposal requires the approval of the High Court, and is under the control of a trustee (refer to the Insolvency Definitions part of this website for more information).

Provisional Liquidator (Obsolete)	This term is obsolete and no longer used. It dates back to the now repealed Companies Act 1955. Refer Interim Liquidator.

Provisional Trustee	A Provisional Trustee is a person whose name is put forward to act in the preliminary stages of the implementation of a Part XV Proposal.

Proxy	A written statement can be made whereby a creditor appoints another person to act on his behalf in a creditors meeting and any other matters pertaining to a Liquidation. Also applies to meetings of companies, societies etc.

Public Notice	When required Public Notice is given by publishing the notice in one issue of the Gazette as well as in one issue of a newspaper circulating in the area of the company’s place of business, or the principal place of business, or the registered office in no place of business.

Quantum	Latin - amount.

Quorum	The minimum number of persons that must be present either in person or by proxy, at a meeting of creditors before the meeting is considered to be a properly constituted one and hence can carry on with the business of the meeting. Under the Companies Act 1993 the minimum number is 3.

Real Property	Immovable property such as a building and land.

Realisation of Security	The firm is also able to assist secured creditors, and advise on the practical problems associated with recovering security and the effects of priority creditors on the value of the security.

Realization	The amount of money received from the sale of assets.

Reasonable Director	Applies to the duty of care defined in the Companies Acts taking into account the nature of the company, the nature of the decision and the position and responsibilities undertaken by the director.

Receiver	“Receiver” is the general term applied to a person appointed either by a secured creditor, debentureholder or the Court to take control of an/or realise assets. A receiver and manager can carry on the company’s business and sell the business and other assets secured by the charge (refer to the Insolvency Definitions part of this website for more information).

Receivership	“Receivership” is the general term applied when a person is appointed as a Receiver. All receiverships are governed by the Receiverships Act 1993 and by the debenture document under which the receiver is appointed (see Fixed and Floating Charge, and refer to the Insolvency Definitions part of this website for more information on Receiverships).

Receiverships	The firm accepts appointment as Receivers for the purpose of realising assets and paying money to Debentureholders. Assets are realised to the best advantage and businesses are sold as a going concern.

Reckless Trading	Directors of a company must not cause or agree to carry on a business likely to create a substantial risk of serious loss to the company’s creditors. An action by the Liquidator or Receiver may be brought against the directors for a breach of this duty. Under the Companies Act 1995, it used to be referred to as “Insolvent Trading” or “Trading Whilst Insolvent”.

Redemption	Buying back.

Registered Office	A company’s registered office is that advised to the Registrar of Companies and is where the register of shareholders and directors is held. It is the address where actions can be served, such as a Statutory Demand. It is usually the place of business or the office of the company’s accountants or solicitors (see also address for service).

Registrar	The Registrar of Companies is a member of the Ministry of Economic Development and maintains records of all registered companies. An annual return verifies information such as the names of directors and shareholders, and the register of charges for debentures etc. Receivers and Liquidators also file their accounts with the Registrar.

Removal from Register	Normally applies to solvent companies but can apply to insolvent companies where no Liquidator is appointed and no creditor has commenced proceedings to have the company liquidated by the Court, also on completion of a liquidation. Previously known as striking off or dissolution.

Respondent	The party who responds to a claim filed in Court against him by a Plaintiff or the person who is being sued. Another term for the Respondent is the Defendant.

Retention of Title – “Romalpa Clause”	A Romalpa Clause covered in the conditions of sale or supply is where ownership (but not normally risk) of the goods is retained by the seller until the buyer has paid in full. The original English case was Aluminium Industries Vassen BV v Romalpa Aluminium Limited, 1976 1 WLR 676, which resulted in the term “Romalpa Clause” being adopted in reference to a Retention of Title clause.

S218 Notice (Obsolete)	Now called Statutory Demand. This was a reference to the now repealed Companies Act 1955. Under the new Companies Act 1993, the section reference is S289.

Secured	The status a creditor has when he has security or a right in some property that he can sell or realize on.

Secured Creditors	A secured creditor is one who has a charge over property. In a liquidation secured creditors may realise the property subject to the charge, value the property and claim the balance as unsecured, or surrender the charge to the liquidator and claim in the liquidation as an unsecured creditor for the whole debt. Any surplus on realisation must be accounted to the Liquidator. The penalty for making a False Claim is imprisonment not exceeding 5 years or fine not exceeding $200,000 (see Fixed Charge, Floating Charge, Charge, and Debenture).

Security	Something given or pledged to a person who is lending money in order to secure or guarantee payment of that debt.

Service of Documents	The procedures for serving documents are set out in the Companies Act 1993. Generally service can be on any one of the following – a director, employee at the head office, the registered office, at the directions of the Court, with the agreement of the company and for companies registered under the Companies Act 1993, the Address for Service. Documents not for legal process can be served on the above as well as by post or facsimile to the registered office or principal place of business, or delivering to a document exchange used by the company.

Shareholders Rights	Certain rights are given to shareholders in the Companies Act 1993 to take action against the directors for certain breaches of duty.

Solvency Test	The solvency Test is set out in the Companies Act 1993 and has two arms being the ability to pay debts as they become due and the value of the assets exceeding liabilities. Before making a distribution or benefit to shareholders, and in other circumstances, the directors must consider the relevant solvency test and sign a certificate stating the reason why they believe the solvency test has been met. This applies in the main to the Companies Act 1993 but also has some application in the 1955 Act (refer to Solvency Test Questionnaire in this website for more details).

Solvent Liquidation	A solvent liquidation is where the board has passed a resolution within 30 days (20 working days) before the appointment of the Liquidator that the company will be able to pay its debts. The directors supporting the resolution must sign a certificate to that effect and state the grounds for their opinion. This was previously known as a members voluntary liquidation and is used for the distribution of surpluses back to the members after paying all creditors.

Special Resolution	Special Resolution means a resolution approved by a majority of 75% or, if a higher majority is required by the companies constitution, that higher majority, of the votes of those shareholders entitled to vote, and voting on the question.

Specific Charge	A lien or security interest in a specific piece of property that can be distinguished from other pieces of property. For example, security over a vehicle.

Statement of Affairs	A document prepared by the Liquidator or Receiver on appointment setting out the affairs of the company. There is now no prescribed form for the document. The directors have a duty to disclose the affairs of the company to a Liquidator or Receiver.

Statement of Claim	A Statement of Claim with notice of proceedings is presented to the High Court seeking an order that the company be put into liquidation

Statement of Realisations and Distributions	A statement prepared in the matter of a liquidation or receivership whereby the realisations and distributions are set out.

Statements of Position	These are prepared quickly and efficiently. Interviews arranged at short notice.

Status Quo	The current state of affairs, or current position.

Statutory Demand	A statutory Demand is a demand made by a creditor requiring the debtor to pay a debt within 15 working days or enter into a Compromise with Creditors. Failure to satisfy a statutory demand is evidence of “Inability to Pay Debts”. Statutory demands lapse if not enforced within 6 weeks (30 working days) of last date for compliance

Statutory Manager	A Statutory Manager is appointed under the Corporations (Investigation and Management) Act 1989 by Order in Council and has wide powers to deal with the affairs of a company or groups of companies (very sparingly used).

Striking Off	Now called Removal from Register.

Subrogation	The legal right that a person or corporation has when he pays someone's debt to recover that money from the debtor.

Summary Judgement	A Summary Judgement is where an application is made to the Court to obtain a judgement against a debtor. Once obtained, this can speed the process of putting a company into an Insolvent Liquidation.

Transactions at Undervalue	A transaction at an undervalue can be described either as a gift or a transaction in which the consideration or proceeds received are significantly less than the true value. In certain circumstances such transactions can be challenged by the Liquidator for companies or the Official Assignee for bankrupts.

Ultra Vires	Latin - without authority.

Unsecured Creditor	An unsecured creditor is a creditor who has no security over the assets of a company in liquidation or bankruptcy.

Usury	Excessive or illegal interest rates.

Vesting Order	An Order by the Court that gives to a person, possession, control or title of property.

Vexatious	An act done by a person in order to annoy, embarrass or otherwise aggravate that person.

Views of Creditors	Liquidators must have regard to the views of creditors set out in a resolution or by the liquidation committee.

Voidable Charges	A voidable charge is one within a specified period prior to a liquidation and where no new valuable consideration has been given. This may be voidable against a Liquidator (see Preference).

Voidable Transactions	A voidable transaction is made when a company is unable to pay its debts within a specified period prior to the liquidation and has a preferential effect. These may in certain cases be voidable against a liquidator.

Voluntary Liquidations - (Insolvent Companies)	Acting as Liquidators and assisting with the necessary procedures to put a company into liquidation voluntarily where the company's directors and shareholders consider that the company is insolvent and should be placed in liquidation.

Voluntary Liquidations - (Solvent Companies)	Acting as liquidators of solvent companies when they no longer serve a useful purpose or when a group of companies is reorganised for commercial or tax reasons.

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