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Company liquidation

(8 Posts)
ChampagneTastes Mon 02-Jan-17 16:10:25

My Dh was made redundant last year. He was owed two weeks pay as well as three months redundancy payment. The company went into a CVA which has now failed and is now having a liquidation meeting.

I'm going to attend as DH's proxy but I'm a bit clueless as to how these things work. We are voting on whether or not we want this particular firm to carry out the liquidation. It has been chosen by the company director so I'm suspicious of them already.

Can anyone advise what sort of questions I should be asking and what I can realistically achieve when there? I think DH is the only employee who is owed money (I'm not seriously expecting the redundancy payment but I want to try to get the wages he is owed if at all possible).

Any tips gratefully received.

ChampagneTastes Mon 02-Jan-17 18:26:50

Bumping for evening traffic. smile

prh47bridge Mon 02-Jan-17 19:53:26

It sounds like they are going into voluntary liquidation in which case it is normal for the directors to choose the liquidator. The liquidator will be an authorised insolvency practitioner. The creditors can propose an alternative liquidator if they wish. This will normally override the company's appointment. Once the liquidator takes over the directors lose control of the company.

The liquidator will present a statement of affairs at the meeting, detailing the company's position. This will give you some idea as to whether your husband is likely to get the money he is owed. The order in which creditors (including employees) are paid is set down by law so I'm afraid there is no way you can bump your husband up the list. The creditors will vote on whether to accept the liquidator appointed by the company or choose their own. Directors are usually questioned as to why the company has become insolvent and how much individual creditors might receive. A liquidation committee may be appointed to help the liquidator and monitor proceedings but this is not compulsory.

I'm afraid it is unlikely you will be able to achieve anything at the meeting other than listening to what goes on, asking any questions you have and getting some idea of how much money your husband might get. Votes are determined by value of debt, so those who are owed the most get the biggest say. The debt to your husband is likely to be small compared to other debts so your vote will probably count for little.

Sorry you and your husband are going through this.

ChampagneTastes Mon 02-Jan-17 20:21:38

Thank you Bridge. That's really helpful. The biggest creditor is a company also owned by the company director which really pisses me off. He's also started a phoenix company which opened the same month that his CVA failed. If nothing else I'd like to make the incompetent little bastard feel a tiny bit of shame. angry

Parker231 Tue 03-Jan-17 15:41:27

Your DH may be able to make a clam to the Redundancy Payments Office for his money. Ask the Liquidator for details in order that you can apply for your money. Takes about six weeks to be paid.

RedHelenB Sat 07-Jan-17 18:49:22

Unpaid wages are high up on the order of who gets what so although your dh may have a wait, he should receive his money.

prh47bridge Sat 07-Jan-17 22:58:54

Unpaid wages are high up on the order of who gets what

I'm afraid that is only partly true.

First to be paid (after the liquidator has recovered their fees and expenses) are creditors with a fixed charge on the company's assets. That normally includes the bank. If there is not enough to pay these creditors in full no-one else will get anything.

Next in line are the preferential creditors. Employees owed wages are preferential creditors but only for amounts that were due in the 4 months preceding liquidation up to a maximum of £800. If an employee is owed more than this the remainder is regarded as an unsecured debt. In general unsecured debts of a business that is insolvent are unlikely to be paid in full and may not be paid at all. And, of course, if there isn't enough money to pay all the preferential creditors in full, employees will only receive part of the preferential amount.

Berthatydfil Sun 08-Jan-17 23:31:22

Redundancy payments office which I think is part of the official receivers office should pay some of the unpaid wages and redundancy but I think the snouts might be capped to set levels. Hopefully the liquidator will point you in the right direction.

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