Distribution of assets in insolvency

 

In business insolvency, during liquidation of a company, the liquidator will ask creditors to send them proof of debt. The liquidator will then approve, or reject, the proof of debt and, if approved, will rank it in the statutory order of payment.

The distribution of the assets in accordance with the statutory order of payment occurs when all the assets have been collected and realised. 

The statutory order of payment - who gets paid first?

The statutory order of payment means that creditors with fixed charges will be paid first, from the sale of the property against which they have the fixed charge.

Following this, expenses of winding-up are paid; this includes the liquidator’s fee and their professional advisors’ fees.

Next to be paid are the preferential creditors (employees and occupational pension schemes) followed by the unsecured creditors, interest payments on preferential and unsecured debts, deferred creditors, and lastly, any surplus is distributed amongst shareholders.

How are the creditors paid?

The liquidator pays creditors by making funds available and then declaring a dividend and distributing the dividend to those creditors who have proved their debts.

There are complex provisions in the distribution of assets in business insolvency, including parts of the assets being ‘ring fenced’ for unsecured creditors instead of going to floating charge holders. 

If you would like to obtain legal advice on the distribution of assets in business insolvency or about the statutory order of payment, Contact Law can put you in touch with a local specialist creditor solicitor free of charge. So, if you have any questions or would like our help in finding local creditor solicitors please call us on 0800 1777 162 or complete the web-form above. 

Call
0800 1777 162
or fill in the form
Our trained advisor contacts you
Your chosen specialist solicitor calls you
Quick enquiry form
Area of law:
Name:
Town/City:
Email:
Phone:
What our clients say about us
"This was the first time I've been to court, which was a nerve-racking experience for me. However, I felt very prepared, I understood my case and representation - this was down to you."
Gavin, criminal motoring, Oct 15
"Your service, and the prompt call back from your recommended firm was very good. I would not hesitate to call again or recommend your service."
Ian, employment law, Truro, July 15
"The firm were excellent, could not have been better! They are exactly what I need right now."
Linda, criminal defence, Thames Ditton, Jul 15
"Your contact and service was immediate and utmost professional, 10/10."
TF, conveyancing, Dudley, Jun 15
"I appreciate the service that you provide. I found you to be courteous, efficient and reassuring at a time when my confidence in justice is completely negative."
Patrick, litigation, Pontypridd, Jun 15
"I cannot tell you how much I appreciate the speed of which you came back to me in. If anyone else can benefit from your help like I have done, it would make my day."
Gail M, family law, Potters Bar, Jun 15
"Your assistance was extremely helpful. Particularly to someone who in 40 years of business has never experienced this sort of issue."
TD, commercial litigation, Galashiels, Apr 15
"It is difficult to express the value Contact Law has to someone like me who had very little understanding of the law and how to proceed forward with my case. Thank you for the service you provided."
AE, defamation law, Worthing, Apr 15
"Thank you for the efficient service I received. I was contacted by your solicitor on the same day as my request. Your quick response to my situation made me feel secure."
AN, employment law, London, Apr 15
"Your service was excellent, very fast and informative. I never got the impression of being pressurised at all. The solicitor you recommended was also excellent – very knowledgeable and supportive."
JHD, Motoring law, Liverpool, Apr 15
Contact Law supports the endeavours of STAE and commends all the work they are undertaking to assist in the plight of the Asian Elephant

 

We use cookies on the Contact Law site to help us improve it.

If you would like to allow our cookies, please click 'Continue' or carry on browsing. For more information on cookies and how to change your settings, click 'More info'.