Your Creditors Voluntary Liquidation (CVL) questions answered.
Following the coming into force of the Insolvency (England and Wales) Rules 2016, any reference to a Meeting refers to a Virtual Meeting, a decision by Deemed Consent or other qualifying decision making procedure.
Following on from our recent article, here are some more Creditors Voluntary Liquidation FAQs that we think you will find useful.
What happens if a winding up petition has been issued against the company?
Any legal action being taken against the company, particularly a statutory demand or winding up petition should be immediately brought to the attention of the Insolvency Practitioner. The Insolvency Practitioner may be able to agree with the petitioning creditor that a creditors’ voluntary liquidation is the best way for the company to be wound up and the directors would still therefore choose the Insolvency Practitioner of their choice. If the company is insolvent, it is important to commence an insolvency process prior to a winding up petition being presented – once a petition has been issued the control of the whole process rests with the petitioning creditor and not the directors.
Once the directors have signed the resolution, can I refer all creditor call to the Insolvency Practitioner?
Yes. Any question or calls from any creditors including suppliers, employees or HMRC are referred to the Insolvency Practitioner who will deal with them.
What happens at the creditors meeting?
It is quite possible that no creditors will actually attend the meeting of creditors. If this is the case you will simply attend at the Insolvency Practitioners office, approve the statement of affairs and other documents. A time period of 15 minutes is allowed for any late creditors to attend before the meeting is formally closed.
The creditors’ meeting has four formal purposes:
– An opportunity for the creditors to consider the statement of affairs produced by the directors.
– An opportunity for the creditors to ask the directors any questions about how the company has been managed.
– An opportunity for the creditors to ask the proposed liquidator any questions or bring any matters to his attention.
– The appointment of a liquidator.
Is the choice of the director’s liquidation likely to be approved by the creditors?
Yes, in most cases creditors meeting will confirm the appointment of the liquidator put forward by the directors. In some instances, if there is a particularly large creditor, that creditor may prefer to appoint an Insolvency Practitioner of his own choice. In view of the voting rules, if this is the case, it may be that another liquidator could be appointed – but this is quite a rare occurrence.
Griffin & King hope you have found these Creditors Voluntary Liquidation FAQS useful. We have helped many people with company insolvency – view our testimonials and see.
You can also find more Creditors Voluntary Liquidation FAQS in Part 1 of our Blogs on CVL Frequently Asked Questions.
If you would like company liquidation explained in more detail then please contact Griffin & King Insolvency Practitioners on 01922 722205, and speak to Tim, Janet or Mark. You can also contact Janet by email on janet.peacock@griffinandking.co.uk, or by text or calling on 07545 806531.
