A liquidator is appointed, in terms of the laws pertaining to liquidation, to manage the liquidation of a Company. A liquidator ultimately takes control of the Company to protect the interests of the creditors and shareholders.
Prior To The Liquidation
Prior to the liquidation/winding up on the Company, and upon his/her appointment, the liquidator has a duty to examine the affairs and transactions of the Company –
- to establish whether any of the current or past Directors and/or Officers of the Company have broken (or appear to have broken) any provision of the Company laws;
- to establish whether any of the current or past Directors and/or Officers of the Company have committed (or appear to have committed) any other offences;
- to report to a general meeting of creditors of the Company the causes of the Company’s financial failure (this particular clause is only applicable to the liquidation of an insolvent Company and not in the case of a member’s/Directors voluntary liquidation).
As an aside, if the liquidator’s report contains any breaches of law or offences committed (or suspected to have been committed), the Master is then required to transmit a copy of the liquidator’s report to the relevant legal/statutory body.
Further Duties of The Liquidator Include:
- consulting/meeting with the Company’s creditors (individually or collectively);
- collecting all information regarding the claims of these creditors (including the receipt of such claims for proof);
- recovering and taking into his/her possession, all of the movable and immovable assets and property of the Company (this must be done as soon as possible after appointment); and
- to realise those Company assets to the maximum benefit for all stakeholders (including creditors and shareholders of the Company).
At all times, the liquidator is required to provide the Master of the High Court with any and all information that may be required by law and to keep the Master up to date as to the progress of the liquidation.
Further, liquidators are required at all times to act with utmost transparency and integrity. If you do not feel that the liquidator is conducting him/herself as such, there are regulatory bodies to which the liquidator can be reported. The liquidator’s conduct can also be reported to the Master. However, it may be wise to consult with a liquidation specialist (such as an attorney) before proceeding to report the liquidator.