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McDonald Vague undertakes over 100 liquidations each year. We are highly experienced at the processes involved, and are able to minimise costs by way of standard documents and procedures. Equally importantly, our experience in this field enables us to maximise recoveries by identifying assets and claims which many other insolvency practitioners could miss.
The most common types of liquidation appointment are as follows:-
Voluntary liquidation - insolvent companies
This is where the shareholders and directors of a company have identified that it is insolvent and an orderly winding-up of its affairs is required. The process is very simple and normally involves shareholders signing a written resolution appointing liquidators.
The ideal situation is that we meet with the directors at an early stage, identify the issues involved and take possession of the company's records. We can then commence our work immediately. This usually produces a better outcome than a court liquidation, where there is invariably a lengthy delay before liquidation occurs. In most cases our fees are payable solely from the assets we realise and there is therefore no cost involved for the shareholders in appointing liquidators.
Note that if the company has been served with a winding up application by a creditor this option is still available within 10 working days of the application being served, but now in very limited circumstances. Shareholders should therefore contact us immediately if they receive a statutory demand.
Court appointed liquidation
This is where the company is insolvent but the shareholders have not appointed a liquidator. A creditor must then present a formal winding-up application. In this scenario a creditor, not the shareholders, decides who is to be appointed liquidator.
We are highly experienced at conducting court appointed liquidations and are frequently able to identify potential recoveries which the directors have not considered. The legal costs of the creditor who issued the winding-up application are a preferential claim in the liquidation. It is our policy to aim to pay such claims whenever possible and as quickly as possible.
We can also recommend law firms which can handle the winding-up application process quickly and efficiently, at relatively low cost. A written consent to act from the proposed liquidators is required at the court hearing.
Voluntary liquidation - solvent companies
McDonald Vague has considerable expertise and experience in conducting solvent liquidations. Companies are often put into liquidation this way when a business has been either sold, closed down or reorganised for tax and/or management purposes. We have distributed many millions of dollars to shareholders through solvent liquidations. Please see our solvent liquidations article for more information on this topic.