Liquidation Process

The key characteristics of a Creditors Voluntary Liquidation are

  • The liquidation is instigated by the Directors of the company;
  • The Directors are obliged to secure all assets of the company at this stage. The Director must also ensure that no further debt is incurred except for the costs of securing the assets and other specific expenses subject to professional advice;
  • A company must give at least 10 days notice of a creditors meeting by way of advertisement in two daily newspapers;
  • The Creditors Meeting takes place at the time and place specified in the advertising notice. The meeting is chaired by a Director of the company, usually the Managing Director. The Chairman is  generally assisted by a legal advisor. Each attending creditor will be given a copy of the Director's Estimated Statement of Affairs which lists the assets of the company, and a list of creditors. A short  statement is usually read out by the Chairman of the meeting regarding the cause of failure of the company. The creditors are then given the opportunity to ask relevant questions. The Liquidator is  appointed;
  • The Liquidator will accept claims for all classes of creditors, including employees, charge holders, revenue, unsecured trade creditors;
  • The Liquidator realizes the assets of the company;
  • The preferential creditors and unsecured creditors claims are agreed;
  • Retention of Title claims are agreed;
  • Liquidators are obliged to report (Section 56 Report) to the Director of Corporate Enforcement in accordance with the Company Law Enforcement Act, 2001. Liquidators are asked to comment   specifically in relation to the honest and responsible behaviour of company Directors in relation to the particular company in liquidation, and whether or not the Liquidator believes the company  Directors should be restricted under Section 150 of the Companies Act, 1990;
  • On the realization of all the assets the costs of the liquidation are paid;
  • If there are surplus funds available the preferential creditors may be paid; and any surplus funds are paid to unsecured creditors.