LIQ­UI­DA­TION

Collective Hub - - FEATURE - WHAT IT IS: WHEN IT’S BEST: THINGS TO CON­SIDER: IT HAP­PENED TO:

A liq­uida­tor is ap­pointed to es­sen­tially wind up the com­pany, so that its as­sets can be sold to pay cred­i­tors and share­hold­ers in order of pri­or­ity. “This process is lengthy,” says Jeremy. “All of the debts of the com­pany are de­ter­mined, as well as all of the as­sets. The liq­uida­tor then uses the as­sets to pay out­stand­ing debts. If the com­pany does not have the as­sets to pay its debts then gen­er­ally the per­son that you owe money to will not re­cover that money.”

If a com­pany can­not pay its debts and vol­un­tary ad­min­is­tra­tion is not an op­tion. “Once a liq­uida­tor is ap­pointed it is very dif­fi­cult for the own­ers of the com­pany to get the com­pany out of liq­ui­da­tion,” he says. “There­fore it should only be used as a last re­sort.”

It doesn’t free you from all obli­ga­tions. “Any per­sonal guar­an­tees that you may have signed dur­ing the term of your busi­ness re­main valid,” says Jeremy. “They may be en­forced against you per­son­ally, re­gard­less of your liq­ui­da­tion. That’s why it’s im­por­tant to seek pro­fes­sional ad­vice first.”

Bor­ders. In 2011, un­able to cope with the tran­si­tion to dig­i­tal, the in­ter­na­tional book store chain was forced to liq­ui­date af­ter fail­ing to sell it­self (and its re­main­ing as­sets) at a bank­ruptcy court auc­tion. At the time, the com­pany said in a state­ment it was un­able to find a buyer will­ing to keep its 400 re­main­ing stores and 11,000 em­ploy­ees in op­er­a­tion, and had in­stead de­cided to sell it­self to a group of liq­uida­tors led by Hilco Mer­chant Re­sources. >

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