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company in administration

Getting CVL - Company Voluntary Liquidation

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A company is in administration and the creditors want 800k. One of creditors (C1) wants 700k. The company has an asset in a form of a land worth 500k

Could the land title be transferred to another company with the following offer:

1-The new company wants to pay 50% cash  

2-out of the 250k cash, 100k to be paid to clear all creditors except (C1)

3-The remaining 150k to be paid to the to (C1)

4- the unpaid 50% of the land, the 250k, to be used by the (C1) as a loan to the new company (the buyer) in exchange for profit sharing after developing the land by a buyer.

Could the above arrangement be considered for CVL - Company Voluntary Liquidation 

and if so when will the company in administration be officially closed and the administration terminated. Will it be when the sale of the land to the buyer is completed which could take few months

Or after creditors (C1) is paid following the development of the site by the buyer which could take 2 years. 

 

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09th Jun 2018 11:40

Visit an insolvency practitioner. If CVL is the appropriate route (it may or may not be, but let's assume it is) then it is down to the liquidator to realise as much cash as possible for the benefit of the creditors. If he/she can get more for the land elsewhere then he/she will. It will be a matter of negotiation. Extremely unlikely though that the liquidator will distribute the proceeds any other way than the normal order of preference though.

You need an IP.

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to Manchester_man
10th Jun 2018 01:45

Manchester_man wrote:

Visit an insolvency practitioner. If CVL is the appropriate route (it may or may not be, but let's assume it is) then it is down to the liquidator to realise as much cash as possible for the benefit of the creditors. If he/she can get more for the land elsewhere then he/she will. It will be a matter of negotiation. Extremely unlikely though that the liquidator will distribute the proceeds any other way than the normal order of preference though.

You need an IP.

Edit, I missed the bit where you said the company is in administration. Doesn't change my advice though, other than 'you need an IP'.

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09th Jun 2018 12:04

What's your interest in this? Surely if the company is "in administration", it's a matter for the administrator.

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09th Jun 2018 12:26

It's not what the new company wants. The liquidator will act in the best interests of the creditors which will be to undoubted sell the land for cash.

So unless you can raise the cash (via a new loan/mortgage not from one of the disgruntled creditors) I would expect the land to be sold with the proceeds being distributed to the creditors.

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By DJKL
10th Jun 2018 13:13

Are none of the creditors secured given the level of debt?

This looks like it is down to C1 to agree or otherwise, as all other creditors look like they get squared there is a deal to be done if C1 agrees.

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