CORPORATE INSOLVENCY

Court / Official Liquidation

This process of winding up an insolvent company involves the court making a winding up order and appointing the Kazar Slaven partners, individually or jointly, as the Official Liquidator. An application for such an order is usually made by a creditor but may be made by the members, a liquidator or ASIC.

The role of the Official Liquidator is the same as in a Creditors’ Voluntary Liquidation, ie to wind up the affairs, distribute equitably the company’s assets, and to conduct an investigation. The primary task of the liquidator in both cases is to protect the interests of unsecured creditors.

The failure of a company to comply with a statutory demand is the most common ground for an application for winding up; for example, the creditor will issue a statutory demand and the debtor company fails to comply within 21 days after service. This evidence is put before the court to demonstrate the company’s insolvency.