Creditors have more involvement in a Creditors Voluntary Liquidation (CVL) than they do in a Members Voluntary Liquidation (MVL). The liquidation process can have some disadvantages for creditors, such as the fact that in some cases a creditor may not be able to take action against a company without the permission of a court once a company is in liquidation.
A Creditors Voluntary liquidation may be beneficial to creditors due to the fact that regular meetings will be held, in which creditors can, along with an appointed liquidator, ask questions regarding the company’s affairs. Creditors can also disagree with the choice of liquidator and can opt to choose an alternative liquidator if they wish.
With the right liquidator, creditors will receive the amounts that they are owed, allowing the company to be brought to an end. The liquidation process will not be complete until the company’s assets have been valued and sold and the creditors have been paid. Creditors can petition to the court in order to force the company to be liquidated compulsorily, but this is a costly procedure and some creditors may wish to opt for alternatives. Read more