What is a Court Liquidation?
A winding up of a company on foot of a petition presented to the High Court is known as a Court or an Official Liquidation.
Who can petition the High Court to wind up a company?
A company, a director or shareholder may petition for the appointment of an Official Liquidator or more likely a creditor of the company can make this petition on foot of an unpaid sum owing by the company to the creditor.
The application must demonstrate that the company is unable to pay its debts.
When is a company deemed unable to pay its debts?
In accordance with Section 214 of Companies Act 1963, a company is deemed unable to pay its debts in the following circumstances:
(a) if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding €1,270 then due, has served on the company, by leaving it at the registered office of the company, a demand in writing requiring the company to pay the sum so due, and the company has for 3 weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor; or
(b) if execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part;
(c) if it is proved to the satisfaction of the court that the company is unable to pay its debts, and in determining whether a company is unable to pay its debts, the court shall take into account the contingent and prospective liabilities of the company.
Who is the Official Liquidator responsible to?
The Official Liquidator is an officer of the court and is required to report to the High Court on the work carried out in the Liquidation and also on his findings in respect of the investigation into the affairs of the company.
How can Hughes Blake assist?
On behalf of a company going into Liquidation
• Act as the company’s nominee as Official Liquidator
• Prepare the Statement of Affairs
On behalf of creditors of a company going into liquidation
• Act as the creditor’s nominee as Official Liquidator
• Review a creditor’s claim against the company
• Advise on retention of title rights
For more information, contact
Neil Hughes, Managing Partner – neil.hughes@hughesblake.ie or
Kieran McCarthy, Partner – kieran.mccarthy@hughesblake.ie