A Compulsory Liquidation (also known as a Compulsory Winding-Up) occurs when the Court, usually on the petition of a creditor, makes an Order to dissolve a company (a Winding-Up Order). Following the Winding-Up Order, the Official Receiver (OR) becomes the liquidator and has a duty to safeguard and protect any assets of the company to pay off creditors. Any remaining assets are distributed to the principals or parent company.
By law, the directors of the company must attend an interview with the OR and provide reasons for the failure of the company and provide a statement regarding the company’s affairs known as a Statement of Affairs (S of A). If the directors fail to co-operate with the OR satisfactorily an application could be made to the Court for their public examination. Failure to attend the public examination would amount to contempt of court and could result in their arrest and imprisonment.
HRPs’ fully trained experts can assist and advise directors should these obligations arise concerning:
- the initial interview.
- the preparation of the S of A.
- any other matter that may be required of them during the Winding-Up of their company.
After the statutory interviews have been carried out and the S of A has been submitted, the OR is obliged, as soon as possible, to convene meetings of the company’s Creditors and Members to appoint a liquidator of their choice.
Delays on the part of the Courts to force non-co-operating directors to attend the statutory interviews often results in delays, sometimes amounting to several years after a Winding-Up Order, for meetings to be set. We are specialists in assisting the OR’s efforts in organising the meetings to bring them in a timely manner. Just contact us for free, no-obligation advice to see if we can help you. You have nothing to lose, but a lot to gain.
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