A liquidator is an independent, qualified outsider who is appointed to wind up the affairs of an insolvent company.
The job of the liquidator is to take control of the company and wind it up in such a way that the company’s creditors receive the maximum possible return.
During an insolvent liquidation, the liquidator will:
- Provide reports to creditors
- Establish the company’s financial position
- Sell its assets
- Investigate why the company failed
- Investigate if any offences were committed by directors or staff
- Make payments to creditors
The liquidator must provide creditors with these reports:
- An initial report
- A statutory report
- Any other reports that are reasonably requested by creditors
The liquidator must give creditors the initial report within 10 business days of their appointment in a creditors’ voluntary liquidation or within 20 business days in a court liquidation. This report will explain the creditors’ rights during the liquidation, such as their right to call meetings, request information, instruct the liquidator and replace the liquidator.
The liquidator may give creditors the statutory report within three months of their appointment.
This report will explain what happened to the company, what assets and liabilities it has, what inquiries the liquidator has made and expects to make, and what the liquidator will do to recover money for the creditors.