Creditors' voluntary liquidation

A creditors' voluntary liquidation (CVL) is a voluntary process instigated by a board of directors calling a general meeting of the company for the members to consider a resolution to wind-up the company. It is often seen as an alternative to the company being wound up by the court on a petition presented against it, typically by a creditor. 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:

•
there is disagreement between individuals involved in the liquidation
•
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
•
the liquidator takes action to recover property disposed of improperly before the liquidation or company property withheld by company officers and/or others
•
the liquidator brings proceedings

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