Creditors' voluntary liquidation

A creditors' voluntary liquidation (CVL) is a voluntary process initially instigated by a board of directors and is an alternative to the company being wound up by the court on a winding-up petition presented by a creditor of the company. For an introduction to liquidation, see Practice Note: Liquidation—an introductory guide.

For when and why CVL may be used, see Practice Note: Creditors' voluntary liquidation—circumstances in which an insolvent company may be wound up voluntarily.

In a CVL, the court will usually only become involved if:

1. •

   there is disagreement between individuals involved in the liquidation

2. •

   the liquidator, a contributory or creditor asks it to determine any question arising in the liquidation or to exercise all or any of the powers which the court might exercise if the company were being wound up by the court

3. •

   the liquidator takes action to recover property disposed of improperly before the winding-up or company property withheld by company officers and/or others

4. •

   the liquidator brings proceedings to recover monies from those that the liquidator maintains are indebted to the company