The Court may appoint an Official Liquidator provisionally at any time after the filing of a winding up application.
The purpose of the appointment of a Provisional Liquidator is to preserve the assets of a company until the Court hears the winding up application and decides whether or not to appoint a Liquidator. Such an appointment gives interim control of the company to the Provisional Liquidator. The appointee is generally empowered to take possession of company assets and preserve them until the hearing of the application to wind-up. Commonly, this entails carrying on the company’s business.
The appointment of a Provisional Liquidator does not mark the commencement of winding up. However, it does place a freeze on any creditor proceedings. Application to appoint a Provisional Liquidator is generally made by a director, shareholder, creditor, or the Australian Securities & Investments Commission in order to quickly stabilise an entity and prevent the dissipation of assets prior to the winding up order being granted. It is normally implemented in hostile environments where a dispute exists.
The above information is by necessity, general in nature and its brevity could lead to misunderstanding. For further information, you are invited to contact O’Brien Palmer.