Liquidation = Creditors will never recover any monies

Reality: During liquidation, there is potential for funds to be recovered—creditors might not face a total loss.

While the extent of recovery depends on the value and liquidity of the company’s assets, a professional liquidator brings the expertise needed to strategically recover and realise those assets.

Liquidation = All claims ranked equally

Reality: Claims are regulated by law and ranked in order of priority.

Secured creditors' claims are only prioritised over assets that were collateralised. 

Recovery efforts funded by any creditor may be prioritised over the claims against the estate (subject to court's approval).

Liquidation = Creditors are sitting ducks

Reality: Creditors may have the opportunity to play an active and pivotal role.

Creditors have the right to voice concerns and vote on key decisions recommended by the liquidator. 

Creditors may volunteer their time on creditor committees to oversee insolvent liquidations.

Next up: Stages of Corporate Distress

We will explore the warning signs of an ailing company and ways to resuscitate the company or lay it to rest. 

Spot the Warning Signs. Choose the Right Exit Strategy. 

Stay with us to find out more!