Liquidation
in New Zealand
The liquidation process is essentially the “winding up” of a company. Liquidation can happen for a number of different reasons including:
- The company reaches the end of its useful life;
- Restructure of a corporate group or affairs of the shareholders;
- Inability to pay debts;
- Realising capital gain to shareholders upon sale of business.
It’s important to understand that each liquidation is different and the outcome can vary greatly. That’s why you need an experienced, safe pair of hands to achieve the best outcome for everyone. At Palliser, we have significant experience across a range of industries, including, but not limited to:
- Construction and property;
- Hospitality and retail;
- Agriculture;
- Service industries;
- Manufacturing.
The Palliser team understands that liquidation can be a difficult time for all involved and is ready and willing to act urgently to assist. We are a dedicated team of hardworking professionals with the specific business and insolvency knowledge you need to ensure the liquidation process is uncomplicated. We take a practical approach to achieve a pragmatic outcome.
Our principal liquidator, Heath Gair, is a well-respected insolvency practitioner with considerable experience who has undertaken hundreds of appointments as a liquidator and receiver from Shareholders, the High Court, Banks and Government entities in most industries throughout New Zealand.
The liquidation process
is essentially the “winding up” of a company
Voluntary Liquidation
This is the most common form of liquidation and essentially means that the shareholders have appointed the liquidator. Generally, the consent of 75 percent of shareholders is required to make the appointment. The process is very simple and will usually require the shareholders to sign a resolution appointing a liquidator. We have precedent resolutions that help to simplify the process, encourage efficiency and cost saving, and ensure the process happens within your timeframe.
High Court Liquidation
A creditor of a company can make an application to the High Court to appoint a liquidator if the company is unable to pay its debts. The general process that a creditor needs to go through is:
Statutory Demand
This is a demand for payment of a particular amount that is owed to the creditor. The company then has three options:
1) Dispute the debt within 10 working days by filing an application with the High Court;
2) Pay the debt or enter into a settlement within 15 working days;
3) Do nothing. After 15 working days has passed, the company will be considered insolvent and the creditor can make an application to the High Court to liquidate the company.
Application to liquidate
This is an application filed in the High Court requesting that the company be liquidated because it is insolvent. The High Court will then place the company into liquidation unless the company can show it is solvent and is able to pay its debts.
10 day Rule
Upon a company being served with the Application to Liquidate, it has 10 working days to appoint a liquidator or be bound by the court process. We have the same role and responsibilities whether we are appointed by the shareholders or High Court. However, we believe it is always in the best interests of a company, its owners and creditors, for the shareholders to take advice during the 10 day window to see whether a voluntary liquidation during this time may be more beneficial to everyone rather than a potentially ugly limbo period of a couple of months before the Court appointment. An early appointment leads to greater certainty, less stress and a less complicated process that ensures a better outcome for creditors.
Solvent Liquidation
Liquidation for a solvent company is a useful tool. It can achieve the following:
- Restructure of affairs;
- Tax free distribution to shareholders following the sale of a business;
- Winding up a company at the end of its life with finality.
We welcome the opportunity to discuss desired outcomes and undertake solvent liquidation appointments for a fixed fee.
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