Likvideerimisjärjekord

Likvideerimisjärjekord, which translates to liquidation order or order of priority in liquidation, is a concept within Estonian law that governs the distribution of assets belonging to a company undergoing liquidation. When a company is insolvent or ceases to operate, its assets are sold, and the proceeds are distributed to creditors according to a specific hierarchy. This order ensures that certain parties have a preferential claim to the remaining funds over others.

The typical liquidation order in Estonia prioritizes secured creditors first. These are creditors who hold a security interest over specific assets of the company, such as a mortgage on property or a pledge on equipment. After secured creditors are satisfied, the order proceeds to preferential creditors. This category includes claims for wages and salaries owed to employees, taxes and social security contributions due to the state, and certain other statutory claims.

Following the satisfaction of preferential creditors, unsecured creditors are next in line. This group includes suppliers, trade creditors, and any other parties who do not have a security interest or a preferential status. Finally, if any assets remain after all creditors have been paid, they are distributed to the shareholders of the company according to their ownership stakes. The precise order and application of the liquidation order are detailed in the Estonian Law of Obligations Act and the Commercial Code, providing a framework for an orderly and fair dissolution process.