How to liquidating assets

Posted by / 02-Feb-2017 02:58

There are a number of factors that the court will take into account when deciding whether or not to make a compulsory liquidation order.

The court has a discretion as to whether or not to make the order.

This is used, for instance, when a retail establishment wants to close stores.

Applications by creditors are by far the most important and common.

Applications may be brought on a number of grounds, the most important being that the company is unable to pay its debts.

Broadly speaking, the liquidation process is as follows: There is a hierarchy that determines the order in which a company's assets must be distributed in a liquidation. Any secured creditors have the first right to the assets and are usually paid out before there is a distribution.

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This process starts with an application to the court alleging that one or more of the required grounds exist.