Anytime a company enters liquidation, it can be a trying time for all involved. The liquidator is often thought of as a repo officer of sorts. It is a misunderstood position, to be sure. However, liquidators have a complex job that involves much more than delivering bad news to creditors. This is a role that must follow a legal process as the liquidator helps companies navigate this trying time. Principle Insolvency is here to talk about the role of a liquidator and what creditors can expect from the liquidation process.
The Role of a Liquidator
When a company is in liquidation, there will be a liquidator that is assigned the job of selling any assets of the company that aren’t charged by secure creditors. They will then use those funds to distribute net proceeds to statutorily prescribed priorities. There is a legal process involved with liquidation and the liquidator must follow the law throughout the process.
How Creditors are Affected During Liquidation
It can oftentimes be tense for creditors when a company enters liquidation. There are some creditors that will be left unpaid or disappointed with the outcome when they are notified by the liquidator. For many creditors, the news that a company has gone into liquidation comes as a surprise. For some creditors, it can cause some financial hardship as a result. It is only fair that some creditors walk away from this interaction feeling like they were deceived.
Qualities Liquidators Bring to the Table
There are several benefits that come from working with a highly qualified liquidator when your company is in financial ruin.
– When working with an experienced liquidator, they will be fluent in the law, they will be certain who their duty is owed to and will commit themselves to reaching expectations. You will find that those who have extensive experience will also approach the liquidation process with empathy.
– A skilled liquidator will also be able to sell assets for the highest dollar amount possible and distribute the net proceeds accordingly. They will be able to do this with minimal cost as well.
– A liquidator will understand what they do have control over and what they don’t. They know that they don’t have any control over the volume of creditors that can claim or the extent of the property to be sold. Liquidators who have extensive experienced will be able to get the best price possible though.
Insolvency Services in Auckland, Hamilton, Levin & New Zealand Wide
When you’re dealing with a company that is in financial trouble, you may not know where to turn. When you turn to Principle Insolvency for your liquidation and insolvency needs, you know that you are in good hands. We will help guide you through the process and answer any and all questions that you may have. We want to help our clients navigate this difficult time as help determine the next step in the liquidation process. Call us today!