Insolvency

Voluntary Initiation

Members Voluntary Winding Up I A company may be wound up voluntarily by way of a members’ voluntary winding up. The procedure is commenced in accordance with the Summary Approval Procedure. The Summary Approval Procedure may also be used in relation to a company whose duration is for a fixed period or until a fixed event occurs.… Read the rest

Vesting

Vesting of Bankrupt’s Assets All property and assets belonging to the bankrupt vest in the Official Assignee for the benefit of creditors, subject to certain exceptions. The bankrupt must notify the Official Assignee of property later acquired.… Read the rest

The Examiner

Examiner and the Directors I The examiner is an officer of the court. He is under the control of the court and owes duties of utmost good faith to it. The principal function of the examiner is to investigate the affairs of the company and prepare a report about its prospective survival or otherwise. … Read the rest

Termination

Termination of Liquidation In a voluntary liquidation, the liquidator must convene final meetings of the shareholders and creditors. The meetings must be advertised. The liquidator presents the accounts of the liquidation and responds to questions. A return is made to CRO certifying that the meetings were held and filing the liquidator’s account.… Read the rest

Swelling Assets

Unlawful Preference I The bankruptcy rules on “asset swelling” apply to a company liquidation. These rules deem certain pre-liquidation transfers to be invalid. The liquidator may challenge certain transfers and unwind them, in much the same way as the Official Assignee may do in a personal bankruptcy.… Read the rest

Repudiating Contracts

Overview The company as distinct from the examiner may, with court approval, repudiate uncompleted contracts to which it is a party where there are proposals for a compromise or scheme of arrangement. Parties who suffer loss as a result of repudiation become an unsecured creditor for the amount of the loss. … Read the rest

Remuneration

Financing and Remuneration The liquidator’s remuneration and expenses are payable in priority to the creditors. In the case of a creditors’ voluntary liquidation, the committee of inspection or the creditors themselves agree the remuneration. It is agreed by the members in a members’ voluntary winding up.… Read the rest

Real Property

Powers and Functions of Official Assignee I The functions of the Official Assignee are to get in and realise the property, to ascertain the debts and liabilities and to distribute the assets in accordance with the Bankruptcy Act. … Read the rest

Procedure

Directors’ Powers and Business On the commencement of liquidation, the company must cease to carry out business, except in so far as required for the beneficial winding up. The corporate state and powers continue until the company is dissolved.… Read the rest

Priority

Third Party Interests Assets which are held in trust or in which other persons have an interest are taken by liquidator/ assignee, subject to those interests. They take no better title that that which the insolvent individual/ company held in them.… Read the rest