Ultimate Landscape Solutions Limited was placed into liquidation by order of the High Court on petition of a shareholder of the company.
The liquidation was caused by a dispute between the shareholders. The company was initially placed into interim liquidation, during which time steps were taken to secure the assets, liaise with stakeholders and wait for the full liquidation hearing.
The company was eventually placed into full liquidation by the High Court at which time the following action points were identified:
- The sale of assets owned by the company and located at its premises; and
- Investigating the affairs of the company
Realisation of assets
The company owned a variety of landscaping equipment including heavy plant equipment and trucks.
Upon appointment steps were taken to secure the assets and arrange for a valuation. Once the company was placed into full liquidation, assets were uplifted and sold by way of auction.
After liaising with directors, it was determined that multiple assets were also located at various mechanical workshops where they were being repaired. Where it was deemed economical, repairs were concluded prior to the sale of these assets, minimizing unsecured creditor claims while maximizing the sale value.
Orderly uplifting of the assets assisted in achieving good result at auction which in turn resulted in all creditors with secured charges over assets being paid.
Furthermore, additional assets that were relocated from the company’s premises were also identified and sold.
Investigation
An investigation was conducted into the affairs of the company. This included an analysis of the bank statements and a review of financial statements and other records.
It was discovered that a significant asset of the company had been transferred to the director prior to liquidation, in lieu of one year’s salary.
After assessing the liabilities of the company and the nature of the transfer it was determined that the transfer amounted to a voidable transaction in accordance with section 292 of the Companies Act.
This was communicated to the director and a settlement was reached resulting in funds being paid to the liquidation.
Outcome
Full distribution to all secured creditors who had a charge over the assets of the company was achieved, and full preferential distributions to former employees and Inland Revenue was also made.
It is anticipated that a significant distribution will still be paid to the unsecured creditors.
