A company is considered insolvent if it is unable to pay its debts or if the value of the company’s liabilities exceeds its assets. If a company is insolvent it may be prudent to commence liquidation proceedings. If a creditor is owed money which the company does not pay, a creditor may be able to commence liquidation proceedings against the company.
The time-frame and cost for liquidation may vary depending on the structure of the business and the complexity of the liquidation process. The liquidation of a company may take four to six months if the process remains administrative, does not include court proceedings and if there are no creditors involved. Companies which do not operate in a regulated industry may be liquidated without governmental or regulatory involvement. However, the liquidator appointed to wind up the company will be constrained to follow statutory requirements for satisfying creditor claims, making preferential payments and distributions to shareholders.
Receivership occurs when a company’s assets are placed under the control of a receiver who is responsible for managing the property and paying the debts of its owners because the owners have failed to meet their financial obligations.
Ms. Gonsalves-Sabola can help you decide whether liquidation or receivership is appropriate and can guide you through either process.
When I was appointed an Official Liquidator of a licensed bank and trust company I often consulted Margaret on legal questions that arose in the liquidation. Margaret Gonsalves-Sabola is a consummate professional, knowledgeable in her areas of expertise, detail-oriented and committed to serving her clients. I highly recommend her for any legal services which she provides.