Liquidations
Liquidation involves the appointment of an independent insolvency professional (a liquidator) to take over the management of a debtor company.
The goals of corporate insolvency involve:
Independent control of company property
Investigations
Reporting to stakeholders
Payment of creditors
The experience leading to the appointment of a liquidator can be a long and stressful process, which does not necessarily end with the appointment of a liquidator. Oftentimes, liquidators will take action against directors to recover property, or take legal action to recover property and funds which can then be used to pay creditors. For this reason, we recommend that directors obtain legal and/or accounting advice prior to the appointment of a liquidator. There are often steps which can be taken, prior to the appointment of a liquidator, which can minimise or eliminate legal problems arising after a liquidator is appointed.
Legal action by liquidators against company directors and other parties can involve claims for:
Return of company property, including ‘loan accounts’ which exist on the books at the time of liquidation
Breach of director duties
Insolvent transactions such as unfair preference payments and uncommercial transactions
Unfair loans
Unreasonable director-related transactions
Creditor-defeating dispositions, or claims against persons for facilitating a creditor-defeating disposition
Aiding and abetting, or being knowingly concerned with breaches of the Corporations Act 2001 (Cth)
Public examinations
Our lawyers have extensive experience across all facets of insolvency law. While we predominantly act for insolvency practitioners, we also accept instructions from business owners seeking guidance or representation through insolvency processes.
If you have questions about the process and its implications, we recommend reading our guide on liquidation for directors, creditors and employees in Australia.
Contact Gear & Co to find out how we can assist you.
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Call us on 07 3709 2547 or email info@gearandco.com.au to take the first step toward resolving your shareholder or partnership dispute.