The Role of Liquidators Assessing Claims in the Liquidation Process

Liquidators play a crucial role in the liquidation process in Australia, particularly in assessing and adjudicating claims made by creditors. As licensed insolvency practitioners, liquidators are entrusted with overseeing the orderly winding up of a company’s affairs and distributing its assets to creditors per the law.

With over 30 years of experience, the team at the Liquidation Advisory Centre can guide you through the process and give you all the information you need to make informed decisions. Here’s an overview of their role in assessing and adjudicating claims:

Initial Assessment of Claims

• Review of Claims: Liquidators begin by reviewing the claims submitted by creditors, which typically include details of the debt owed, supporting documentation, and any relevant agreements or contracts.
• Verification of Information: Liquidators verify the accuracy and validity of the information provided in the claims, ensuring they meet the legal requirements for proof of debt.

Investigation and Due Diligence

• Examination of Company Records: Liquidators thoroughly examine the company’s financial records, transaction history, and other relevant documents to assess the legitimacy of creditors’ claims.
• Identification of Preferential Payments: Liquidators investigate any preferential payments or transactions that may affect the validity or priority of creditors’ claims, ensuring fair treatment for all creditors.

Adjudication of Claims

• Assessment of Priority: Liquidators determine the priority of creditors’ claims based on the legal hierarchy established by the Corporations Act 2001 (Cth) and other relevant legislation. Secured creditors, priority creditors, and employee entitlements are typically given priority over unsecured creditors.
• Evaluation of Proof of Debt: Liquidators evaluate the proof of debt provided by creditors, assessing the evidence and documentation provided to support the claim. They may request additional information or clarification from creditors to substantiate their claims.

Decision Making and Communication

• Decision on Validity: Liquidators decide on the validity and quantum of creditors’ claims, determining the amount to be paid to each creditor based on their entitlements and the company’s available assets.
• Communication with Creditors: Liquidators communicate their decisions to creditors, providing explanations and reasons for any adjustments or rejections of claims. They may also facilitate creditors’ meetings to discuss the distribution of assets and address any concerns or disputes.

Dispute Resolution

• Resolution of Disputes: Liquidators may facilitate the resolution of disputes between creditors or between creditors and the company, seeking to reach mutually agreeable outcomes where possible.
• Legal Proceedings: In cases where disputes cannot be resolved amicably, liquidators may initiate legal proceedings or seek court intervention to resolve contentious issues and ensure fair treatment for all creditors.

The Role of Liquidators Assessing Claims

Liquidators play a pivotal role in assessing and adjudicating claims in Australia’s liquidation process, ensuring that creditors’ rights are protected, and assets are distributed fairly and equitably. By conducting thorough investigations, evaluating evidence, and making informed decisions based on legal principles and regulatory requirements, liquidators uphold the integrity and transparency of the liquidation process.

At the Liquidation Advisory Centre, we facilitate effective communication with creditors and proactive resolution of disputes, as these are essential elements of the liquidator’s role, facilitating the orderly winding up of the company’s affairs and the distribution of assets in accordance with the law.