LIQUIDATION & SEQUESTRATION
Feeling overwhelmed; unable to pay your creditors. We can help you with either liquidation or sequestration.
Liquidation and sequestration are not one of the same processes.
There is a general confusion that liquidation and sequestration is one and the same which is incorrect.
Liquidation
Liquidation takes place when a Company does not have the required cash to pay its creditors.
It is the winding up of entity i.e a Company, Close Corporation, Trust.
Is usually brought by an application out of court.
The process involves an application to the court to obtain provisional order when obtained halts any legal action by your creditors.
The creditors are notified. Should an attorney not receive intention to oppose by any creditors a final liquidation order is granted by the court.
The court order and copy of the application papers is then served on the Master of the High Court who will then appoint liquidator to deal with insolvent estate.
Security needs to be submitted on the Master.
Sequestration
Sequestration is available to individuals who are not in a position to pay their debts and are over debted.
Sequestration can be either voluntarily i.e at the request of the person him/herself alternatively at a request of the creditor i.e compulsory sequestration.
There has to be some benefit to the creditors involved.
The process includes a Valuator being appointed to valuate the assets to ascertain whether debtor is over indebted and has benefit for his/her creditors.
The Trustee once appointed will then liquidate the assets to settle the debts distributing the proceeds to the creditors in their discretion.
A statement of affidavit is handed to most and all creditors and notices published in local newspaper and government gazette, prior to a Court Application.
