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CS Professional · Insolvency and Bankruptcy - Law and Practice · Voluntary Liquidation of Companies

Himalaya Polymers Ltd, which owes money to several creditors, files the directors' declaration on 1 March. The members pass the special resolution for voluntary liquidation and appoint an insolvency professional as liquidator on 20 March. By what date must creditors representing two-thirds in value of the debt approve this resolution?

Creditors representing two-thirds in value of the company's debt must approve the resolution within seven days of its passing. With the resolution passed on 20 March, the deadline is 27 March. The four-week limit relates to the members' resolution, not creditor approval.

  1. AWithin seven days of the resolution, that is by 27 MarchCorrect
  2. BWithin four weeks of the declaration, that is by 29 March
  3. CWithin fourteen days of the resolution, that is by 3 April
  4. DWithin thirty days of the resolution, that is by 19 April

Explanation

The proviso to section 59(3)(c) requires creditors representing two-thirds in value of the debt to approve the resolution within seven days of the resolution. Counting from 20 March gives 27 March. The four-week period applies to passing the members' resolution after the declaration, not to creditor approval.

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