A company is placed into compulsory liquidation when the Court makes a winding up order because a creditor has presented a petition. The Official Receiver ("OR") is appointed liquidator. A creditor can ask the OR to appoint an Insolvency Practitioner of the creditor's choice as liquidator. Gore and Company is asked to act as liquidator by creditors who believe that there are assets that can be recovered but that the process might prove difficult and drawn out.
In a voluntary liquidation the company itself may decide to wind-up its affairs and the shareholders or creditors will select an Insolvency Practitioner to act as liquidator.
A liquidator takes on responsibility for the affairs, business and property of the company in place of the directors.
The liquidator will sell all of the assets of the company and, after paying the costs of the liquidation, he will distribute these funds to creditors. Liquidators may chair meetings of creditors and must maintain communication with creditors, advising them of current and prospective investigations into assets. A liquidator will make a full examination of the business’s records and interview directors and senior staff and advisers to discover and collect in the company’s assets and may make further investigations to disclose hidden assets.
A liquidator’s fees can be a percentage of the value of assets the liquidator has had to deal with or, more usually, by reference to the time spent in administering the liquidation. A combination of these methods may sometimes be used.