Rights of share holders holders of a ltd. company, in sale proceeds of company's assets by ol
AVG
(Querist) 05 September 2011
This query is : Resolved
A Limited Company, which went into Liquidation and was handed over to Official Liquidator.
The banks & financial institutions filed recovery suit in DRT against the company and the Directors who had given their Personal Guarantee & also the Legal Heirs of the deceased Directors, who had given their Personal Guarantee
The Directrors & Legal Heirs of the Deceased Directors settled their Personal Guarantee Obligations with the financial institutions & the bank.
The banks & financial institutions continued the company.
The Official Liquidator auctioned the Assets of the Company by the order of the High Court at a much higher value than the Total Claims of Financial Institutions, Banks & Other Claimants (claims filed with Official Liquidator) put together.
Kindly advise :
1. Process of Disbursal of Funds received by Official Liquidator as the Sale Proceeds from the Auction of the Assets of the Company. (The Sequence & Order of Payments made to various creditors / claimants) ?
2. How can the Share Holders & Equity Holders of this Ltd. Company, claim their entitlement & rights in the sale proceeds of the company's assets by Official Liquidator?
A prompt response would be highly appreciated.
Regards,
Raj Kumar Makkad
(Expert) 05 September 2011
You re advised to visit the following link and obtain the desired information:
http://www.companyliquidator.gov.in/12/aboutus_data.htm
prabhakar singh
(Expert) 05 September 2011
what else you want,Mr.Makkad has provided you all that you wanted.
Guest
(Expert) 05 September 2011
Dear AVG,
When a corporation dissolves, one of its first actions is the liquidation of corporate assets. Creditors of the corporation are the first to be paid with the funds received from the liquidation. Owners of debt securities are also paid before shareholders.
Once these debts are paid, the remainder is paid to the shareholders. Preferred stock is paid before common stock. Some preferred stock includes a liquidation preference that fixes a price per share of preferred stock. If preferred stock includes this preference, it must be paid before the corporation pays any amount to the common stock.
Common stock owners do not have any special liquidation rights and will receive assets on dissolution only after senior claims have been paid.
TO CLAIM THEIR SHARES OUT OF THE LIQUIDATED ASSETS, every shareholder has to apply to the OL before the fixed date already notified by the OL. If any creditor or shareholder fails to prefer his claim up to the fixed date, his claim is not entertained.
prabhakar singh
(Expert) 05 September 2011
that's true and goes in any liquidation.
AVG
(Querist) 05 September 2011
Thank you all so much for your valuable inputs.
Regards,
AVG
(Querist) 07 September 2011
Sir, can you please also advise that :
What is the pattern / order of payment to creditors of a limited company from sale proceeds of its assets by official liquidator?
Regards,
Guest
(Expert) 07 September 2011
Dear AVG,
If the sale proceeds of company's assets is less than the debt of the company, the creditors can get only on prorata basis, unless fully secured. Creditors with fully secured loans can get full repayment of their dues.
