Liquidation

Good question! If there is, literally, no money / assets at all administrators will take on pro bono work. It helps to enhance their reputation as honourable professionals (and it’s cheap publicity!) Mind you, if there are no assets, there’s no hassle in disposing of those assets so the administrator merely has to call a meeting of creditors and inform them that there is not going to be any pay-out of the amounts owing.

If there are some assets, does the administrator / liquidator take priority over the fixed charge debenture holders? It’s difficult to imagine a liquidator releasing an asset to the debenture holders without first seeking some recognition of payment due. However, where the fixed charge debenture holders physically hold the title documents to the asset, I imagine that they shall rank higher than the liquidator.

It’s equally difficult to imagine that a company in liquidation holds only assets that are subject to fixed charges. Sure, it must happen, but it has to be a rare situation.

To summarise, if there are assets available to the liquidator, then it is MOST probable that the liquidator will be paid

OK?

You’re very welcome, and thank you for the thought-provoking question.