The removal of the concept of official liquidator is a significant move towards transparency in the allocation of costs in the administration of corporate insolvencies.
Not only without being paid for work done, but in many cases without even being reimbursed their necessary outlays.
These include ASIC search fees incurred in investigating breaches of the law to be reported to ASIC, under s 533 of the Corporations Act and related provisions.[iv]The reason for many such companies being assetless is that often by the time a creditor obtains a winding up order from the courts, the company’s assets may not exist, through depletion or unfair transfer.
No liquidator will be obliged to take any appointment, court appointed or otherwise, unless they agree, and that agreement may be conditioned upon the requirement that their fees for doing so are recoverable from company assets, or paid for or indemnified, by choice.
It would remain open for liquidators to take appointments “on spec”, with the good taken with the bad; or from some sense of professional obligation in a particular case.
Ultimately, it is the creditors of companies with assets who fund the regime, by way of reduced dividend payments.