10th November 2021
A Centrebind liquidation enables the appointment of an office-holder before creditor agreement has been obtained, and the procedure is carried out with a specific aim in mind. It’s used to protect creditor interests by quickly disposing of perishable goods so they don’t lose their value.
During a typical liquidation procedure a company’s assets are sold for the benefit of its creditors, but the timescale of a ‘regular’ liquidation would risk the loss of asset values in certain circumstances. When goods are likely to deteriorate quickly, such as when a farm enters liquidation, the liquidator can seek sanction from the court to sell any perishable goods quickly.
The name Centrebind originates from Centrebind Ltd, a company that entered liquidation in the 1960s. It won a court case to allow the sale of its perishable goods before obtaining agreement from creditors.
The overriding duty of a liquidator is to protect the interests of creditors, and in this respect Centrebind liquidations are no different to ordinary liquidation processes. The main difference between a regular liquidation and Centrebind is the speed with which the office-holder can act.
Previous rules of voluntary liquidation required the office-holder to call a creditors’ meeting, but regulations have changed to the extent that in-person meetings rarely take place unless specifically requested by a creditor.
In either instance, Centrebind liquidations allow for approval for the disposal of perishable goods to be sought by the liquidator before creditors have been approached.
Centrebind liquidation is an obvious choice for farming business insolvencies where fresh produce is involved. This process would also be appropriate for fresh food outlets that have entered liquidation, perhaps companies in the hospitality industry, or market trader businesses that have been set up as limited companies – essentially, any corporate entity where perishable goods constitute a significant part of the assets.
If you would like more information on the Centrebind liquidation process, what it involves, and whether it is appropriate for your business, please get in touch with one of our expert team.
Real Business Rescue are insolvency specialists and advise organisations industry-wide. We operate an extensive network of offices throughout the UK, and can arrange a free same-day consultation to quickly establish your needs.