Whether you’re a creditor, director, or stakeholder, our FAQs provide clear answers to the questions we hear most often.
General FAQs & Creditor Claims FAQs
We’ve answered some of the most common questions about insolvency, creditor claims, and our recovery process below. If you can’t find the information you’re looking for, our team is here to help.
McDonald Vague FAQ's
A company owes me/my client money and I want to get it placed into liquidation
Please see our For unpaid creditors page.
Can I do anything else to recover what I am owed apart from just submitting a claim form?
If you have credit insurance, you should check with your insurer whether you are covered for all or part of your loss. If you are on the Invoice basis for GST accounting, you may be able to make a bad debt adjustment in your GST return. Check with your accountant on this. You may also need to make a bad debt adjustment in your income tax return if this has not already been included. Again, check with your accountant.
We recommend always taking the time to submit a claim form, as it is often unclear at the start of a case whether a dividend will be paid. Our six monthly reports are only sent to creditors who submit claims, so you may not be aware of developments giving rise to a payout to creditors. We are only permitted to pay dividends to creditors who file formal claims. Please also notify us of any change in address, as dividend payments are made by cheque rather than direct credit.
How long does liquidation take?
It varies from case to case. A simple liquidation will often be completed in six months. Those involving more complex matters can take a year, or sometimes several years. The factors that tend to delay completion of a liquidation are long drawn-out legal matters or sale of high value assets.
Why does the Inland Revenue Department ("IRD") always get preference?
The IRD ranks as preferential for PAYE and GST, on the basis that these funds are held by the company in trust for the IRD. Only the core debt is preferential, not any related interest or penalties. Income tax is also not preferential.
The IRD’s preferential claim ranks behind employee claims for wages, holiday pay and redundancy pay. These preferential claims are capped at $20,340 per employee.
Who gets paid first in a liquidation?
This is a slightly complicated area, but the broad outline is as follows.
After the costs of liquidation, secured creditors and preferential creditors are paid first, and then unsecured creditors. Creditors with valid specific security over stock and equipment (such as retention of title clauses or leases) generally have priority to recover those items where they can be clearly identified. The main categories of preferential claim are employees for wages, redundancy pay and holiday pay (up to a maximum of $22,160 per employee), and the IRD for GST and PAYE.
If there is say $50,000 remaining to pay to unsecured creditors and they are owed a total of $500,000, they will each receive a dividend of 10c in the $ on their debt.
How do you get paid?
In almost all cases our fees come solely from the realisation of assets. Therefore, if we recover nothing then we are not paid for our time.
I am not receiving any information from the liquidators?
See above. It may be that we do not have your correct details. Please email us quoting the name of the insolvent company and your postal address.
How often do you report to creditors?
In a liquidation, we are obliged to report to creditors every six months. These reports are mailed to creditors, filed at the Companies Office and also placed in the reports section of our website.
What is the difference between a receiver and a liquidator?
A receiver is usually appointed by a bank or other creditor holding a General Security Agreement (“GSA”) covering all the company’s assets. Although a receiver has a duty to preserve the rights of other creditors, his or her powers are limited. Once the GSA holder is repaid, the receiver ceases to act. If there are further assets to be realised or matters requiring investigation, a liquidator will also be appointed.
A liquidator’s powers are much wider than those of a receiver. Liquidators have investigatory powers, and powers to set aside voidable transactions and bring actions for offences under the Companies Act.
When should a company look at solvent liquidation?
Solvent liquidation enables the removal of companies from the register which are no longer required, whilst minimising the risks in relation to creditor claims which may later come to light. It can also enable capital gains to be distributed tax-free to shareholders.
How do I know if a company is in liquidation?
It’s very easy – just go to www.business.govt.nz/companies and search on the company name in the box at the top right. Details of any insolvencies, together with all reports to creditors, are listed on the ‘Documents’ tab.
How is a liquidator appointed?
A liquidator is usually appointed either by the shareholders, or by creditors through an application to the High Court. For shareholders, the procedure is generally as simple as signing a resolution.
There are therefore normally no legal costs involved in a shareholder appointment. In a court appointed liquidation, the costs of applying to the court are a preferential claim in the liquidation.
McDonald Vague SAQ's
Who can submit a claim
“A debt or liability, present or future, certain or contingent, whether it is ascertained debt or a liability for damages, may be admitted as a claim against a company in liquidation” (Section 303(1) Companies Act 1993).
A claim by an unsecured creditor against a company in liquidation must be in the prescribed form and contain full particulars of the claim and identify any documents that evidence or substantiate the claim.
A secured creditor has certain rights and duties defined under Section 305 of the Companies Act 1993. A secured creditor may claim as an unsecured creditor for any balance due after deducting any net amount realised and must account to the liquidator for any surplus.
If your claim is made on behalf of a creditor, please specify your relationship and authority.
By submitting a claim online, you accept that the electronic submission of your claim is equivalent to your signature to a hardcopy document. You confirm that you are an authorised person and have the authority to submit the claim and that you understand it is an offence to submit a false or misleading claim.
Please note, it is an offence under Section 304(6) of the Companies Act 1993 to make or authorise the making of a claim that is false or misleading or omit or authorise the omission that may lead to a false or misleading claim.
Unsecured creditor claims
Creditors who do not hold securities, have realised the security and have a shortfall, are unpaid and do not qualify as a preferential creditor, are likely to be unsecured creditors.
Most creditors in a liquidation fit into this category.
Preferential creditor claims
For information on “preferential claims”, click here to access the seventh schedule of the Companies Act 1993.
Employees fit into this category for wages, holiday pay and redundancy up to a statutory limit.
Secured creditor claims – Registered on the PPSR
If your claim is as a secured creditor, please complete a secured creditor claim form. You will be secured if you hold a general security agreement (“GSA”) or have a specific security interest registered on the Personal Property Securities Register over stock or equipment.
You may have secured creditor status with an unregistered security if there are no competing interests that are registered, and you hold valid documentation. Please contact the case manager if you consider this may apply.
Secured creditor claims – NOT registered on the PPSR
If you have an unregistered claim for retention of title or hold an unregistered specific security interest, please contact the manager by email.
Secured creditor claims – Contact a manager
If you have a registered security on the Personal Property Securities Register and have not been contacted by the case manager, please send an email to the manager providing details of the security.
Submit a Claim in a liquidation
Download a form and send it by email to claims@mvp.co.nz or alternatively by post to:
PO Box 6092, Wellesley St,
Auckland 1141
If you are unsure whether you have registered a claim, send an email to the manager.
Six-monthly reporting will be emailed rather than posted; email the case manager if you would rather receive reports by post.
Other Claims
If you are a creditor or a person with an interest in a particular liquidation, you can send a request for information. Please advise the purpose of the information you seek by email to the case manager.
To register your interest in the purchase of assets from a company in a particular industry, send an email to be entered on our database. This includes interest in any businesses we may have for sale from time to time.
How to access a report on an insolvent company
- If you are a creditor, please log in with your username and password and access the report.
- If you are a creditor but have submitted your claim manually, please register to gain access to our online claim database.
- If you are NOT a creditor but have an interest in a particular insolvency, send an email to the case manager. Please include the reason for your request.
Notice of admission or rejection of Claims
The liquidator will give notice in writing of the rejection of any claim pursuant to Section 304(4) of the Companies Act 1993.
The liquidator will, as soon as practicable, admit or reject the claim in whole or in part and, if the liquidator subsequently considers that a claim has been wrongly admitted or rejected in whole or part, may revoke or amend the decision.
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