Resigning as Liquidator


T

Tim

Morning;

This is quite outside my experience, can anyone offer some advice?

I've accepted appointment for a members voluntary liquidation. I discussed
with the company secretary the company's position in advance of accepting,
and was assured (verbally) that it was merely a holding company, it held
shares in one quoted company; no liabilities, no bank accounts; the
shareholders simply want to liquidate the company and distribute the assets
up the group. The "group" is not in the UK, and I understand the liquidation
is part of an ongoing tax exercise.

On receiving a statement of affairs from a director, I learn that the
company has assets of some £300 million, liabilities of some £250 million,
and a bank account with around £1,000 in it!

Clearly, had I known this in advance, I would not have accepted
appointment - I do not have the resources to cope with a liquidation of this
magnitude; even if I find that the assets are a single investment, the
liability is the original cost, and the bank account is whatever remains of
dividends; I'm simply not set up to look into the liabilities side as
completely as I would like.

Can I simply resign (after due consideration, and getting explanations from
the directors as to the disparity etc)? Or do I have to ask to be removed?
Or do I re-negotiate the fee, and employ staff (only joking!)?


Tim
 
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R

Rhoy the Bhoy

Tim said:
Morning;

This is quite outside my experience, can anyone offer some advice?

I've accepted appointment for a members voluntary liquidation. I
discussed with the company secretary the company's position in
advance of accepting, and was assured (verbally) that it was merely
a holding company, it held shares in one quoted company; no
liabilities, no bank accounts; the shareholders simply want to
liquidate the company and distribute the assets up the group. The
"group" is not in the UK, and I understand the liquidation is part
of an ongoing tax exercise.

On receiving a statement of affairs from a director, I learn that
the company has assets of some £300 million, liabilities of some
£250 million, and a bank account with around £1,000 in it! [snip]
Was this not before the members' meeting appointing you ?
 
R

Rhoy the Bhoy

Tim wrote:
[snip]
On receiving a statement of affairs from a director, I learn that
the company has assets of some £300 million, liabilities of some
£250 million, and a bank account with around £1,000 in it!

Clearly, had I known this in advance, I would not have accepted
appointment - I do not have the resources to cope with a
liquidation of this magnitude; even if I find that the assets are a
single investment, the liability is the original cost, and the bank
account is whatever remains of dividends; I'm simply not set up to
look into the liabilities side as completely as I would like.
[snip]

You may be un-necessarily nervous, and, anyway, you might end up
earning a few mill (but I do see your problem)
 
T

Tim

Rhoy;

The sequence of events was:

1. Discussion;
2. Meeting appointing me liquidator
3. Docs filed at Companies House
4. Letter sent to directors regarding statement of affairs
5. Letter received advising me of liabilities etc.

I've taken advice from my Institute, and the Insolvency Practitioners; the
latter seemed fairly stunned that anyone would want to ever resign as a
liquidator from a solvent company (I see where they're coming from!) but
both agreed, after discussion of the full circumstances that I can't resign
as liquidator without having a replacement in place, and that I shouldn't
act. No advice on what I "should" do, though ;-(

The other possibility is to try and find a way of undoing the liquidation,
or bringing the company out of the liquidation untouched; after all, it's a
members voluntary; the company's not insolvent, there should be some way in
which the members can cancel a members voluntary liquidation.

Regards


Tim
 
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R

Rhoy the Bhoy

Tim wrote:
[snip]
both agreed, after discussion of
the full circumstances that I can't resign as liquidator without
having a replacement in place, and that I shouldn't act. No advice
on what I "should" do, though ;-( [snip]
You should find a replacement.
 

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