Court liquidation

BRI Ferrier is regularly appointed by courts that determine a business is insolvent and that liquidation is required to protect the interest of creditors.

The appointment enables us to take control of the business and its affairs, allowing for an orderly winding down of operations and realisation of assets.

Various parties may initiate court action. They include creditors, shareholders, company directors and regulators.

There are two types of court liquidation – provisional liquidation and official liquidation.

Provisional liquidation

BRI Ferrier may be appointed as provisional liquidator after a creditor files an application for winding up a business and before the winding up order is made. This is an interim appointment that occurs when a creditor is concerned that a company’s assets are being transferred outside the business or are otherwise threatened. As provisional liquidator, we take control of the business and assets to preserve the status quo pending the hearing of the winding up application.

Official liquidation

A court may appoint BRI Ferrier as official liquidator, generally after a company fails to meet the demands of unsecured creditors. On appointment, we take control of a company’s business and assets. We thoroughly investigate the company’s affairs, assess all possible claims and provide timely insights into how the liquidation is likely to proceed. We then implement a strategy to realise the assets, commence liquidator claims, investigate company affairs and report to ASIC.

 

CASE STUDIES

Maya Catering

A shareholders’ dispute resulted in BRI Ferrier’s appointment as official liquidator of Maya Catering Pty Ltd. We initially decided the business should continue to trade to retain its value while a buyer was found. We negotiated with landlords and bankers to offer the freehold property and business for sale in one line. As a result, a successful sale was achieved with the petitioning creditor’s costs, the secured creditor and all outstanding employee entitlements paid in full. Ordinary unsecured creditors were also paid a dividend of 100 cents in the dollar.

Nowra Shoe Barn

On appointment as official liquidator of Nowra Shoe Barn Pty Ltd, BRI Ferrier decided the business should continue to trade while working to attract a buyer of the two stores. When no interest was forthcoming for the business’s sale as a going concern, we proceeded with a ‘sell down’ strategy. We negotiated favourable advertising rates on the local radio station and, as a result, achieved sales exceeding $220,000 over a four-week ‘closing down’ period. The strategy resulted in the petitioning creditor’s costs and all employee entitlements (including compulsory superannuation) being paid in full.

The Coffee Bean Shop

Upon BRI Ferrier’s appointment as official liquidator of The Coffee Bean Shop Pty Ltd, we decided to continue trading the business to protect its value while seeking urgent expressions of interest from potential buyers. With the support of the market management, we identified 44 interested parties. Fourteen offers were received, resulting in the business being sold as a going concern. Although the director had maintained minimal books and records, the sale resulted in all known employees receiving 100 cents in the dollar and unsecured creditors, who were owed almost $300,000, receiving a substantial return.

Andreones Lawyers

When BRI Ferrier was appointed as official liquidator of Andreones Lawyers, the Law Society had already put in place a law practice manager to manage solicitors’ trust accounts and open client files. Our role was to enable the business to trade while sourcing a purchaser. Once we found a buyer we negotiated a position whereby the law practice manager appointed the buyer as their agent. This provided clients with certainty during the period between exchange and settlement. The wind-up resulted in the payment of the petitioning creditor’s costs and all unremitted compulsory superannuation plus nominal interest. There was also a return to the secured creditor and part repayment of funds advanced by the Department of Education, Employment & Workplace Relations under the General Employees Entitlements and Redundancy Scheme.

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