Liquidation

mike1983

Hello everybody,

I got a new client last month and, unfortunately, they have been forced into liquidation due to rent arrears.

This is my first dealing with a liquidation whilst being out on my own.

Their landlord wants them out and is threatening to keep their stock to cover the arrears.

The problem is that when the business incorporated, they didn't change their tenancy agreement from partnership to limited company. The stock belongs to the limited company!

If the landlord did this, would the value of the stock, which has been used to pay off a 'personal' debt, be treated as a directors loan??

Does anybody know a way around this?

They have also asked whether they could sell all their remaining stock to suppliers/customers at a cheaper price. I have warned about wrongful trading and that they mustn't take anything else on. I they did sell it, would the money generated need to stay in the company?

Many thanks in advance

Guest

The liquidators should be dealing with all the above, including the landlord and holding any stock for disposal.
Once the liquidation letter has gone no one other than the IP can lay claim on any assets unless by a charge, which again will be dealt with by IP.
Also the landlord should be advised that he should not be undertaking correspondence with the initial directors only IP.
As for selling stock to suppliers this could be preferential settlement, therefore exposure of Directors!!