What is a Creditors' Voluntary Liquidation (CVL)?
A Creditors’ Voluntary Liquidation is the liquidation of a company that cannot pay its debts as they fall due. The process is instigated by the company itself when the directors realise the company is insolvent, they are obliged by the company’s Act to put the company into liquidation.
What are the director’s duties for an insolvent company?
The directors must immediately act to protect the assets of the company, prepare to cease trading and organise the orderly wind-down of the company. While it is the directors duty to organise the creditors meeting, in practice, we will organise in the notification of creditors, the advertisements in the newspapers, the booking of the meeting rooms and, if required, the provision of a specialist insolvency solicitor. We will also provide templates for all statutory documents required for the Creditors Meeting.
What do directors need to do for the creditors meeting?
The directors are themselves responsible for the presentation of two documents for the creditors meeting: The Estimated Statement of Affairs and the Chairman’s Statement. The Estimated Statement of Affairs is a summary of the assets and the liabilities of the company. The Chairman’s statement is a narrative of the company’s history, detailing the company background and outlining the reasons for the liquidation. These can be completed by the directors with or without the assistance of their financial advisors.
What does the liquidator do after appointment at the Creditors meeting?
- Realise any assets and debtors of the company.
- The Liquidator will deal with all company issues relating to the banks, the Revenue Commissioners, the Sheriff, Creditors, Court Actions etc..
- Process all employee claims. In the event of the company not having the funds to meet the Redundancy or Insolvency Claims (Arrears of wages, Holiday pay & Minimum Notice), we will prepare all employee forms and liaise with the Department of Social Welfare.
- Distribute any dividend to creditors in line with their preferential status.
- The Liquidator reports to the Director of Corporate Enforcement within six months of their appointment.
How much will it cost?
There are two ways of funding a Creditors Voluntary Liquidation. Under the Companies Acts the Liquidator is entitled to take their fee from the sale of company assets. If there are no realisable assets or debtors in the company, it is the duty of directors to fund the liquidation themselves. Irish Insolvency offer the most competitive fixed fee in the industry, while operating to the highest professional standards.
Irish Insolvency offer low cost creditors voluntary liquidations, call for a free consultation.