Many businesses struggle with bad debts. Unpaid debts can financially cripple a business, and the time and/or cost of recovering that debt may exceed the value of the debt itself. Often creditors take the risk of paying lawyers and/or debt collectors a significant amount of fees without the assurance of success. If creditors are not …
Selling a Debt: The Legalities, The Contract and the Forbidden Read More »
If you have ever ‘stood-by’ a customer who is going through a rough patch by continuing to supply goods/services on credit and holding off on receiving payment, some of us will know there can be a happy ending to this story. With your goodwill and support your customer might manage to trade out of its …
A company may be placed into liquidation by passing of a special resolution of its shareholders (see ss 106 and 241(2)(a) of the Companies Act 1993. For a special resolution to pass, it requires the majority of 75% (or a higher majority if the constitution requires it) of the votes of those shareholders entitled to …
So you want to serve a statutory demand. What does it mean? What are the consequences? What must the debtor do and by when? These are all questions that need to be asked and answered within a tight space of time. A statutory demand is a demand made pursuant to s 289 of the Companies …
Most commonly, creditors appoint a liquidator by utilising the statutory demand process (if the debt is more than $1000) and then if unsatisfied, file an application at the High Court seeking a liquidation order. Where debtors don’t pay us, we commonly appoint liquidators at the High Court. There is a process and consequences involved in …
On Occasion, it is useful to appoint an ‘interim liquidator’ to hold the fort while the usual process is traversed. The Court may appoint an interim liquidator in order to maintain the value of a company’s assets during the period following the filing of a liquidation application. This is a powerful safeguard in regard to …
Liquidation of Corporate Trustees. It is well reported that New Zealanders are keen establishers of trusts. Thanks to trusts, property owners are able to create comfort that if they ever fail, they will be able to retain the benefit of their property. A trust is not a separate legal entity, as such the trustees are …
Receivership is a process in which a secured creditor appoints a receiver to collect and sell the debtor’s assets over which the secured creditor has a security. A private receiver (as opposed to a Court appointed receiver) cannot be appointed unless there is a contractual power to do so. Such contractual power is generally set …
If debtors don’t or can’t pay, it can result in bankruptcy. Bankruptcy can occur when an individual is unable to pay their debts as they become due. A debtor can make a voluntary application for bankruptcy or can wait until a creditor adjudicates them bankrupt via the prescribed process at the High Court. However, bankruptcy …
If a debtor is unable to repay its debts and believes there is no prospect of this changing, the No Asset Procedure (“NAP”) provides an alternative to bankruptcy as a one-off opportunity to sort out the debtor’s financial affairs without a formal bankruptcy. Requirements to entering the NAP A successful application will give a debtor …