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Provisional liquidation is a process which exists as part of the corporate insolvency laws of a number of common law jurisdictions whereby after the lodging of a petition for the winding-up of a company by the court, but before the court hears and determines the petition, the court may appoint a liquidator on a "provisional" basis.[1] (The provisional liquidator is appointed to safeguard the assets of the company and maintain the status quo pending the hearing of the petition.) Unlike a conventional liquidator, a provisional liquidator does not assess claims against the company or try to distribute the company's assets to creditors, as the power to realise the assets comes after the court orders a liquidation.[2]
In practice most instances of applications for a provisional liquidator involve some type of allegation of fraud or other misconduct relating to the company.[3]
- ^ "Provisional liquidation: a quick guide". Practical Law. Retrieved 30 July 2015.
- ^ "Provisional Liquidation". Worrells. 25 September 2013. Archived from the original on 13 June 2015. Retrieved 30 July 2015.
- ^ Steven Fennell and Darren Bradshaw (19 June 2013). "Provisional liquidation and fraud". Lexology. Retrieved 30 July 2015.