A CVL involves the Company or LLP with the assistance of a licensed insolvency practitioner “IP” producing a statement of affairs and report to creditors and calling a meeting of its members (shareholders) and a meeting of creditors, which usually follows straight after the meeting of members. These meetings will be chaired by a director of the company though overseen by the IP.
At the meeting of members, the company will be placed into Liquidation and a Liquidator will be appointed. The creditors meeting affords the creditors the opportunity to ask questions of the director about the demise of the Company, form a creditors committee, either confirm the appointment of the Liquidator or appoint a different IP as Liquidator, and agree the basis of the Liquidators fees for calling the meetings’ and assisting with the required paperwork if no creditors committee has been formed.
A Liquidator has a duty to act in the best interest of creditors, regardless of whether they are nominated by members or by creditors.