Liquidations - Who gets paid first?

The biggest concern for employees, creditors and banks of an insolvent company is ‘Am I going to get paid and how much?’

The order of payment is as follows:

  1. Holders of a fixed charge
  2. Liquidator’s fees and expenses
  3. Preferential creditors’ claims (which comprises of certain statutory tax and employee benefit liabilities)
  4. Holders of floating charges which have not crystallised prior to the winding up
  5. Unsecured creditor claims
  6. Deferred debts ranking pari passu
  7. Members or contributories to the Company

 The function of the liquidator is to identify the assets of the company, take those assets under control, liquidate those assets, identify the creditors and distribute those assets in order to satisfy all or part of the claims of such creditors in accordance with the law relating to priority of payments. 

Declan Moore is Audit Manager in OSK. Contact OSK Accountants Dublin for more information.

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