When you are a creditor that has invoices that are going unpaid, it is a frustrating position to be in. No matter how much you want to work with the company that is not giving you the money that you are owed, you may find that you are left with nothing other than liquidation to help you. Appointing a liquidator is a process though. Principle Insolvency is here to talk about what the process of a creditor appointing a liquidator looks like.
Steps for Creditors to Appoint a Liquidator
If a company isn’t responding to the invoices that you are sending them, it may be time to take matters into your own hands. This often involves a liquidator to help you get what is owed to you. Here are the steps to do so:
– Statutory Demand: The first step when a creditor is turning to a liquidator is a statutory demand. There is a minimum debt of $1,000 owed for this process to begin. When this happens, the company has 15 days to respond by paying the debt, negotiate a repayment method, or apply to the High Court.
– Liquidation Application: There are cases where the company allows the statutory demand to expire and then the creditor is able to apply to the High Court to liquidate the company. To complete this process the creditor must supply an affidavit that confirms the debt and lack of payment, evidence of the statutory demand, and a nomination for a licensed liquidator.
– Court Hearing: When the hearing arrives, the court will determine whether or not the company is insolvent and will appoint a liquidator to the case. Once the liquidator is appointed, they have 24 hours to let the Companies Office know. This is when the liquidation process begins.
– Liquidation Process: At this point, the liquidation process is underway. The liquidator will work to take over the company’s assets and take a close look into their financial affairs. During this process, the liquidator will disperse the proceeds to creditors according to the law.
Creditor Rights During Liquidation
Creditors have rights during the liquidation process that are important to know and understand.
– You can file a formal complaint noting the money that is owed
– You have a right to get reports on how the process is going
– You can be invited to attend meetings and have the right to vote on key decisions
– You can request access to records and can comb over reports
Insolvency Services in Auckland, Hamilton, Levin & New Zealand Wide
If you are a creditor or a company that is dealing with insolvency, you may not know where to turn. At Principle Insolvency, we will help you know what your options are whether you are a creditor, director or owner of a company. We will walk you through the next steps and help you navigate these challenging times of uncertainty. Call us today!