Creditors Voluntary Liquidation (CVL)

A Creditors Voluntary Liquidation (CVL) is usually initiated by the company’s directors when the company is insolvent.

The first step is for the board of directors to have a board meeting to agree that the Company should be placed into liquidation and that notices should be sent to shareholders and creditors to hold members and creditors’ meetings to resolve to liquidate the Company.

Who uses a creditors voluntary liquidation CVL? – Normally CVL’s arise when the shareholders cannot continue in business. There will be advantages for them in going through with a CVL because a line is drawn on the past and some closure arises.

Calling the Creditors Meeting

Ten days notice of the meeting must be given to all creditors. The notice sent to creditors, should be accompanied by a general proxy and a special proxy in the prescribed format. The meeting must be advertised at least ten days before the meeting in at least two daily newspapers in the district where the registered office or principal place of business of the company is located.

Agenda for the Creditors Meeting

A creditors meeting has three main items of business. These are:

-To present a Statement of Affairs to the creditors

-To give the creditors an opportunity to appoint their choice of liquidator

-To give creditors the opportunity to appoint a Committee of Inspection

Liquidation Process

The duties of a liquidator are to inquire into the company’s affairs, realise its assets, pay its debts and distribute any surplus to its members.

Services

We advise on all the necessary steps to place a company into a creditor’s voluntary liquidation. We can also act as liquidators and we have performed many liquidations in the last number of years. We also provide the following services:

-Advising Directors and Shareholders on the procedures to ensure they meet their legal responsibilities

-Assistance with the preparation of Statement of Affairs, the calling and conduct of the various meetings

-Advice and assistance to Creditors including representation at Creditor Meetings

-Acceptance of appointment nomination by the company and, if so appointed, dealing with all aspects of the insolvency including – asset realisations, quantification and prioritisation of Creditors, employee claims, retention of title, ODCE reporting, etc.

If you have concerns about what actions to take, contact us at dvm@dvmannion.ie