Whether they threaten your company or stand in the way of you getting paid, it is useful to know how much firepower they have. It's all in the name.Brennans solicitors
As it is a little depressing to “call in the liquidators” and perhaps to make life a little more exciting for these undertakers of the corporate world, liquidators often adopt generic aliases such as “Insolvency Professional”.
The least imaginative of these aliases is the “Provisional Liquidator”. This is the name given to liquidators who are called in before a winding up order is made. The court does this to preserve the assets if the winding up order is delayed or if there is a damaging conflict in the company. As the assets are usually long gone, in small business there may not be much call for them.
A more promising role for the liquidator is as “Administrator”. An Administrator is appointed by a company which is ready to fall on its sword if necessary. The Administrator takes over and is allowed a time out (“Voluntary Administration”) to try and keep the company going for about a month while keeping the creditors informed. The Voluntary Administration starts and ends with a creditors’ meeting. At the final creditors’ meeting, it is decided if the company must go into liquidation or alternatively, the creditors come to an arrangement in writing with the company to allow it to continue (“A Deed of Company Arrangement”).
Liquidators are often asked to be “Receivers”. For instance, in your loan/mortgage document to your bank you will agree that they can appoint a Receiver to get their money back if you do something wrong, such as not meeting repayments. They can sell your home which is the security for a loan. Charges agreed to by companies to secure a loan usually contain a power to appoint a receiver to "sell up" the charged assets. In the role of Receiver, liquidators are not all powerful, so expect them to be a little bit grumpier.
So, Insolvency Professionals have many guises, it is not all rushing in, taking the money and nailing down the lid. There is a little bit more to it than that. Do not assume that they are all powerful without first understanding the authority under which they act.
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