creditors voluntary liquidation

[7800]

what's it mean when a company does this, in this case it looks like the directors have drawn the money off then done one of these, i'm guessing getting any owned will be unlikely
The 'restructuring' firm want £10K just to put a creditors meeting together!

 

[Pasty]

I'm afraid you have probably lost your money on this one. Sorry.

 

[pgk]

This is the situation commonly seen where the shareholders withdraw their monies from the company. They often seek to make it look like they are the biggest creditor by seeking to ensure many of the other creditors claimed do not go before the liquidator they have appointed. Need to see recent accounts to see if significant value has been shifted out of the company in the last couple of years If creditors owed more than 50% of the company's debt get together they can vote out liquidator appointed by directors who may be shall we say "tame" to replace them with one who will do the job properly. Often see directors/liquidator making quick sale of company assets at undervalue to the Phoenix company thus moving out significant value at the expense of trade creditorsvand HMRC. As creditor liquidator is obliged to provide you with regular statements of affairs.

 

[phillipe]

just like mr green

 

[alex04w]

Taking the three words in reverse.

The company has gone into liquidation. It is a voluntary liquidation (as opposed to a compulsory liquidation i.e. wound up by the court). It will have been liquidated by either the directors or the shareholders.

Finally it is a creditors liquidation. This means the company is insolvent and it should be the creditors who choose the liquidator. In reality the directors will nominate the liquidator and the creditors will not bother to change the person.

Although nominated by the directors, once appointed the liquidator should be independent and work for the creditors.

If you believe that the directors have been taking money out of the company, then bring it to the attention of the liquidator. They will have a duty to investigate it.

Such transactions can be overturned or reversed as 'transactions at undervalue', 'preferences', 'unlawful dividends' etc

 

[7800]

interesting development : director of company just gone into administration is also director of new company which has taken over a local authority contract from company in administration .
Surely this can't be legal ?

 

[a9driver]

That happens all the time. Go bust leaving big debts start new business add contractor to existing name or make do with previous companies initials and then continue to trade as though nothing happened. Easy way to make a profit by not paying the suppliers.

 

[Cowcalf]

how do they get away with it, seems quite common way of working these days ?

 

[alex04w]

interesting development : director of company just gone into administration is also director of new company which has taken over a local authority contract from company in administration .
Surely this can't be legal ?

It might be legal or it might be illegal, it depends on the circumstances.

The Administrator is charged with running or administering the company they are appointed to. Their remit is to supposedly turn the company around and make it profitably again. A company seldom comes out of administration again, but it does occasionally happen.

Whilst the company is in administration, the Administrator can sell off assets like a profitable contract. The sale must be at full value and for the benefit of the company. They cannot knock it down cheap to a friend or the former director.

However, sometimes the person who will pay the most is the person who knows the contract best - the former director of the company. It does not seem morally right to the creditors of the former company, but if the full value has been paid it is legal. If the contract has been knocked down cheap, then it is not legal and the person responsible is the Administrator.

In some cases the administration is 'pre packed' i.e, the sale to the former director is arranged even before the company is placed in administration. This is very tightly controlled and the administrator must file all sorts of returns with the Insolvency Service to prove the deal was properly conducted.

Where a local authority is involved, it is usually not a simple case of some other company taking over the contract. Most government type contracts have clauses preventing their transfer without the authority's consent.

If you are concerned about the transfer of the contract, speak to the Administrator and see if they have knowledge of its transfer. Also speak to the local authority to see if they know they are dealing with a different company and if they consented to the transfer of the contract.

 

[Welsh Farmer]

If the company was trading whilst knowingly insolvent then you have recourse against the Directors personally and often that is a good way to proceed in order to recoup your money owed.

Yes, there are some genuine insolvencies but for the unscrupulous ones then whilst they don't give two hoots about the effects of their amoral behaviour and the trouble it causes they HATE it when the bailiffs come-a-knocking on their door hassling their wife and family and letting the neighbours know they owe money .... keep it up long enough and generally if they do have the assets and means to pay they will pay up. Just make it VERY personal in the legal sense

 

[Campbell]

The Bernard Mathews employees look like they have lost all their pensions, and the unsecured creditors [owed many £m] get Penny in the Pound.