A low or nil dividend estimate is a planning signal. Understand its assumptions and any remaining rights without treating uncertain recoveries as available cash.
Corporate Recovery Partners
01 / 06
The report offers little prospect of payment
A small steel supplier reads a liquidator's report indicating that unsecured creditors may receive nothing. The debt is a significant part of its expected cash. The owner wants to know whether to keep chasing the company or wait for a better result. The first step is to understand the estimate and adjust the business's own plan.
Identify the creditor category, asset assumptions, costs and investigations described. Check whether the report states a final outcome or a preliminary expectation. A possible recovery may depend on uncertain litigation or asset realisation.
Ask the liquidator focused questions about matters affecting your claim. Avoid treating an optimistic comment from the former director as stronger evidence than the practitioner's qualified report.
Confirm the balance and provide required supporting documents. Keep contact details current and monitor notices even if the expected dividend is nil.
ASIC explains that a creditor must prove its debt before a dividend is paid. A poor forecast is not a reason to assume claim requirements no longer matter if circumstances later change.
Gather any guarantees, security documents or relevant insurance information. Ask an appropriate adviser whether a separate route exists and what restrictions, costs or deadlines apply.
Do not assume a director automatically owes company debts or that an insurance claim will succeed. Evaluate each possible right on its own evidence and economics.
Remove unsupported recovery dates from the operating forecast. Discuss accounting treatment with the accountant and identify commitments affected by the loss.
Review customer concentration and credit controls before replacing the lost revenue with equally risky work. Continue monitoring the liquidation, but avoid funding present obligations from money the report does not support.
