What does a liquidator actually do?

The liquidator’s notice raises questions

A supplier receives a liquidator’s notice after a customer collapses. The supplier wants immediate payment and assumes the liquidator represents the former director. Meanwhile, the director is unsure what records to provide. Both need a clear understanding of the practitioner’s role rather than treating the appointment as an ordinary debt negotiation.

Understand the purpose of the appointment

A liquidator takes control of company affairs in the winding up and deals with assets, claims and required investigations. The work is governed by the applicable insolvency process, not simply the former owner’s preferences.

Ask for the appointment details and official contact information. Verify correspondence before sending sensitive records or changing payment instructions. Keep the company’s correct name and identifier on every enquiry.

Source: ASIC — Liquidation: creditor guide

Provide information that can be used

Directors should prepare accounting records, bank access, assets, creditors and contracts. Creditors should organise invoices, delivery evidence, payments and correspondence supporting their claims.

Flag assets belonging to someone else, disputed balances and transactions requiring explanation. Distinguish firsthand information from suspicion. Specific documents and dates are more useful than a general statement that something was wrong.

Follow the claim and reporting process

Read notices and reports, identify requested forms and track response dates. Ask how to submit a claim and obtain confirmation that supporting documents were received. Keep copies of everything supplied.

Do not assume that lodging a claim establishes a particular return or payment date. Ask the liquidator about the status of the administration and the process for questions or objections. Obtain independent advice on any disputed determination.

Keep separate rights under review

A supplier’s security, ownership claim or guarantee may need advice beyond an ordinary unpaid-invoice claim. A director may have personal obligations distinct from company debts.

Use the liquidator’s information to understand the company process, and a suitable independent adviser for your own rights and exposure. Avoid accepting a predicted recovery as certain cash in your business forecast.

Provide evidence and track the claim

Verify the appointment and contact details.

Prepare evidence relevant to your role.

Track notices, forms and confirmation of receipt.

Get independent advice on security, guarantees or disputed decisions.

Call CRP today about understanding a liquidation and coordinating support for your creditor or director position.