Liquidators

A liquidator is a person or firm appointed to wind up the affairs of a company or estate, primarily by collecting and realising assets to pay debts and, if any funds remain, distributing them to creditors and shareholders. In corporate insolvency, the liquidator takes control of the company, realises assets, and resolves the company’s liabilities in accordance with applicable law.

In corporate insolvency, liquidation can be voluntary or compulsory. Voluntary liquidation comes in two main forms: members’ voluntary liquidation (MVL), where the company is solvent and shareholders appoint a liquidator to wind up; and creditors’ voluntary liquidation (CVL), where the company is insolvent and the liquidation is initiated with shareholder and creditor participation. Compulsory liquidation is court-ordered, typically on petition by creditors or other interested parties.

Duties of a liquidator include securing and realising assets, collecting receivables, and examining the company’s past transactions for potential avoidance or recovery of value. They must pay creditors in a defined order of priority, with secured and preferential creditors typically ahead of unsecured creditors. The liquidator may also investigate, challenge improper transfers, convene or participate in creditors’ meetings, and decide whether to sell the business as a going concern or by asset sale. They prepare final accounts, report to authorities, and supervise the formal dissolution of the company.

In probate or estate contexts, the term is used less commonly; executors or administrators usually perform winding-up duties, though some jurisdictions may use the term “liquidator” for fiduciaries charged with settling an estate.

The exact powers and procedures of a liquidator vary by jurisdiction, but the core purpose remains the same: to orderly wind up affairs, realise assets, pay creditors, and discharge the company or estate.