Facing business insolvency is stressful, but it's important to keep a level head and find an appropriate plan of action to minimise the potential costs. It's a complex procedure, and without the right guidance and expertise, things can quickly snowball into a far more serious situation with severe consequences.
McDonald Vague undertakes over 100 liquidations each year, and with over 25 years experience in the industry, our team has assisted countless businesses facing insolvency in all sorts of industries. From maximising recoveries to reducing costs, our goal is to make the liquidation process as painless as possible once a company is no longer able to pay its creditors.
What is liquidation?
Liquidation is when an outside party is appointed to identify and sell a company's assets or business. The process can involve closing the business, paying creditors and investigating any potential financial offences.
In most cases, liquidation occurs when a company becomes insolvent (unable to pay its debts), closes, or is reorganised. Liquidation can happen in two primary ways, voluntarily or through the courts:
Voluntary Liquidation (Insolvent Companies): This is when the shareholders and directors of a company identify the need for liquidation, and take steps to wind up the business's affairs. The earlier a voluntary liquidation takes place, the better, as our team can begin work immediately. Voluntary appointments will usually result in a better result than other forms of liquidation.
Court-appointed Liquidation: If a company is insolvent but its shareholders and directors do not appoint a liquidator, a creditor may formally present a winding-up application after a formal demand process. The team at McDonald Vague has worked on countless court-appointed liquidations, and can present potential recoveries solutions that make the process far easier and simpler.
Voluntary Liquidation (Solvent Companies): Not all liquidations arise through business insolvency, and a solvent company may be put into liquidation due to sale or reorganisation to distribute tax free capital profits. In these situations, McDonald Vague can assist with distribution of assets and funds among shareholders.
Regardless of the type of liquidation that you require, making contact with the experts sooner rather than later will save you valuable time and money, while ensuring the process goes as smoothly as possible.
Our liquidation and insolvency services
Aside from handling the intricacies of liquidation and providing valuable advice, McDonald Vague can recommend law firms and reorganise company affairs. With enough warning, it's possible to turn a business around and avoid insolvency altogether. These business turnaround solutions have worked with countless companies in all sorts of different industries, so if you have any concerns about the financial stability of your business, it's always worth reaching out for advice.
There are some other avenues to consider when a business becomes insolvent, and the team at McDonald Vague can assist with a wide variety of these. Here are a few of the options:
- Voluntary Administration : Administration is a tool that businesses can use to trade out of debt and difficulty, avoiding the need for liquidation. McDonald Vague is able to act as an administrator of a company and seek positive outcomes. Even if continuing operations is not possible, our team can ensure shareholders and creditors receive a better return than if the business were immediately liquidated.
- Creditor Compromises : Another way to avoid liquidation is by reaching a compromise with creditors, an area that McDonald Vague has extensive experience in. These compromises can yield far better results for both parties, and make it possible for companies to continue operating without the stigma of liquidation.
- Receivership : Appointing a receiver makes it possible to sell or trade on a business. McDonald Vague's directors are often appointed as receivers, and can ensure the interests of the secured creditor are protected while debt is repaid.
The team at McDonald Vague is experienced in all areas of insolvency. Our team is made up of professionals from a diverse range of backgrounds, including chartered accountancy, law, the New Zealand Police and specific industries such as the manufacturing sector. This depth of knowledge allows us to tackle every situation individually, finding a tailored solution that provides businesses and owners with the very best chances of either avoiding liquidation or coming out of the process with minimal financial and reputational damage.
For more information, get in touch with the McDonald Vague team today.