Liquidation problem

Liquidation problem

Didn't find your answer?

Co. now concedes that it is losing the battle to continue and their sales/marketing man is offering to purchase stock, trademarks and set up new company with existing members acting in a 'consultancy role'.

The company has one main creditor which is the bank for approx £100k. This is under the loan guarantee scheme and was never secured.

The company really wants to draw a line under the whole thing and is not interested in rescuing the company. As far as I understand it a compulsory winding up would be the option to take as then no liquidator need be appointed.
Can the director or member of comapny
invoke the compulsory winding up just like a creditor can. Can this be done immediately.

They would have to stop trading, but could they arrange for their key customer to now move their business to the new company? in order not to lose the customer.
The existing directors would like to be employed as consultants. Is this possible? What would be the time frame for the new operation to start from the resolution to wind up?
Or would this be misfearsance of money. In this case future sales?

I also understand that any cash received for stock or other assets would have to be used to repay the creditors in the normal order of preference.

The aspect of fraudelent or wrongful trading could be looked into although I do not believe this was ever in their mind untill now.The company has been trying genuinly to get back on an even keel but have been beset by problem after problem mainly from the supply side which have ultimately taken it's toll

Also if smaller bills are paid before the winding up including my own would the main creditor argue that preference has been given and that there was intenet to do this?

Thank you

Roger

Roger

Replies (1)

Please login or register to join the discussion.

avatar
By johnpaylor
08th Aug 2004 10:51

See an insolvency practitioner sooner rather than later
If the company is no longer viable, it's best to take advice as soon as possible, otherwise the directors are more likely to face criticism for tyrading whilst knowingly insolvent, and questions of preference arise when payments are made. Even if amounts are relatively trivial, the DTI Disqualofication Unit will take this into account in considering directors' conduct. A winding up order by the court is probably best avoided. A liquidator will have to be appointed in any event, costs are higher than in voluntrary liquidation, and the process is much slower, requiring a court hearing etc. The company clearly does have assets, and a voluntary liquidator is often better placed to preserve their value with a quick sale. Lastly, I note your problem over fees. At least with a voluntary liquidation you could charge the cost of providing information for the statement of affairs as a cost of liquidation, payable in priority.

Thanks (0)