Liquidation and insolvency - who pays the liquidator

T

thames582

Registered User
Messages
8
Hello

Our limited company is not insolvent yet. It has only one creditor (the landlord) and X years left on the lease. We're closing the company as we've been making serious losses. There is no personal guarantee in place.

Can we do a Members Voluntary Liquidation (MVL)? We don't have enough money to pay ALL the remaining rent on the lease but we can pay it for the next few months, as the rent falls due.

So my questions is:
1. Can we do an MVL? Or do we have to wait until we have no money whatsover and have the creditor (landlord) wind us up?
2. Who pays the liquidator? The company or the directors? Can the company use the last few months rent to pay the liquidator?
3. Can anyone recommend/has anyone used closedforbusiness.ie?

Thanks for your help.
 
You can't use closedforbusiness.ie as you have debts.

Whoever gets the liquidator pays. So if you wind up first you pay, if the landlord does he pays.
 
Time said:
You can't use closedforbusiness.ie as you have debts.
Click to expand...

Agreed

Time said:
Whoever gets the liquidator pays. So if you wind up first you pay, if the landlord does he pays.
Click to expand...

Who told you that?



You can't do a members voluntary liquidation as the company does not seem to be in a position to file the auditors declaration.

1) creditors voluntary liquation, with only one creditor, its possible that this may backfire, as the creditor would be entitled to attend the creditors meeting and vote on the directors nominee, if however there were other creditors, that would increase the number of votes at that meeting. No doubt you will get quotes of between €1,000 and €3,000 + vat for this. Don't just go with the lowest, as in a creditors voluntary liquidation the liquidator will have to get permission from ODCE not to go after a restriction to stop you acting as a director, you want a credible experienced liquidator for this.

or

2) See will the landlord take back the lease, cancel the liability and allow you to apply for the strike off proceedure (no assets or liabilities).



In theory the company pay's the liquidator, depending on the records of the company, the liquidator may ask the directors to guarantee a minimum fee.



Never used them, so can't comment, but from the information in your post, you can't use them anyway.
 
is the liquidator not paid from the disposal of the assets of the company, as opposed to 'by the company'.
If the company is insolvent with no assets what is there to pay him / her?
 
hastalavista said:
is the liquidator not paid from the disposal of the assets of the company, as opposed to 'by the company'.
If the company is insolvent with no assets what is there to pay him / her?
Click to expand...


The directors could guarantee a minimum fee.
 
@hastalavista - we're not insolvent yet. There would be enough in the company to pay a liquidator, as opposed to the directors paying them or being paid from the sale of assets (which wouldn't cover it). My question is can a company write a liquidator a cheque with the last few bob and once that cheque is cashed the company are insolvent (or as close to it as makes no odds)

@time
It says on the closedforbusiness.ie website you can use them if "I want to close down this company but it has substantial assets/liabilities". Am I missing something?
iquidationsforless.ie is part of closedforbusiness.ie.
 
A liquidator has first call on the assets of a company. If the situation is really as simple as the landlord being the only creditor (nothing due, for example, to staff or the Revenue Commissioners) then any payment to the liquidator effectively comes out of the landlord's pocket.

It might be worthwhile meeting with the landlord and laying all cards on the table. You might manage to arrive at a deal.
 
Even if a company has assets (even money) it may still be insolvent. It is the directors responsibility to liquidate the company when they first become aware that it will not be able to meet its debts as they fall due. This would definitely be the case if the company has ceased being able to generate income to meet its expenses. It appears to me that the company is insolvent now. If it is evident that the company is insolvent and will not be able to meet its future debts then he must liquidate. By not liquidating he could be accused of giving preference to certain creditors. The liquidator gets the money first but will have to assure the creditors that their fees are fair. So yes the liquidator when appointed can take the existing money in the company and pay himself. At the creditors meeting the landlord could get his own liquidator appointed if he can get them cheaper. If you do not take this route you may find yourself having to finance the liquidation costs in the future.
 
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