Fraser Frayne Insolvency Practitioners Limited
Old Canal Cottage
Bath BA2 8BS
Tel: 01761 437754
CREDITORS’ VOLUNTARY LIQUIDATION
The Creditors’ Voluntary Liquidation procedure is for insolvent companies to wind up their financial affairs in an orderly manner and can be a useful alternative to compulsory liquidation.
The detail of what happens:
An insolvent Company will produce a report for its creditors and shareholders for them to consider with a Licensed Insolvency Practitioner nominated to be Liquidator to run the Liquidation if shareholders vote to place the Company into Liquidation.
Where required, a Liquidator can be appointed at short notice when it is necessary to act quickly to preserve and protect the Company’s assets.
Shareholders will hold their meeting to appoint the Liquidator and question directors.
This appointment will then be considered by creditors in the following ways:
a) a vote by post for a set date and time deadline wherein Creditors cannot change the Resolutions put to them to consider (called "Deemed Consent"). A route suitable for uncontroversial cases.
b) a vote on line at a 'virtual' online Creditors' Meeting by telephone or the internet, or both where facilities permit. This is suitable for more difficult cases or where Creditors wish to ask questions and pass resolutions or propose resolutions.
If Creditors object to a deemed consent meeting, or wish to have an actual physical meeting, they may request this and this will be provided if 10% of creditors by value, by number or 10 separate Creditors require it.
In the meeting, Creditors may ratify the appointment or choose another Insolvency Practitioner to be Liquidator. Except at a deemed consent meeting, Creditors will usually be asked to pass certain resolutions including how the Liquidator is to be paid and whether to form a creditors’ committee to oversee the Liquidator’s actions, assist him with his enquiries and represent the Creditors as a body.
The Liquidator’s task can be quite varied, but primarily is to realise the Company’s assets, distribute funds to creditors and investigate the activities of the directors and the Company. The Liquidator has considerable legal powers if necessary to assist him in his tasks and duties.
This outline is general and may not apply to a specific company’s circumstances for which a CVL may not be appropriate. The outline, views and suggestions set out are not intended to constitute professional advice, nor to be a substitute for specific advice.
© 2017 Fraser Frayne Insolvency Practitioners Limited
Registered in England Co. No. 6934426 VAT No. 972 6786 64
Registered Office: Old Canal Cottage Dunkerton Bath N E Somerset BA2 8BS
Company Secretary: Jan Bartoszewski; Directors: Matthew Frayne BA, FIPA, FABRP; Fraser Frayne-Watt
Licensed Insolvency Practitioner licensed by the Insolvency Practitioners Association
Valiant House 4-10 Heneage Lane London EC3A 5DQ