Insolvency & Restructuring
Liquidation, Administration, Receivership and restructuring, with a licensed Insolvency Practitioner.
SC Legal advises boards, creditors, secured lenders, shareholders and office-holders on insolvency and restructuring under the Insolvency Act 2009 and the Companies Act 2001. Shaheena Carrim is a licensed Insolvency Practitioner and accepts appointments as liquidator, administrator and receiver or receiver-manager, so the firm sees insolvency from both the office-holder's and the adviser's side.
What does the insolvency practice cover?
- Appointments as liquidator in shareholders' and creditors' voluntary winding up and in court-ordered winding up.
- Appointments as administrator and as receiver or receiver-manager.
- Solvent and insolvent restructurings.
- Administration and deeds of company arrangement.
- Compromises with creditors and schemes of arrangement.
- Receivership and enforcement of security.
- Statutory demands and contested winding-up petitions.
- Directors' duties and liability where a company is insolvent or close to it.
- Voidable transactions and recovery claims.
- Insolvency of global business companies and funds, and removal of companies from the register.
Liquidation, administration or receivership?
These procedures do different jobs. Liquidation ends the company: the liquidator takes control, realises the assets and distributes the proceeds to creditors in the order the law sets, then the company is removed from the register. Administration aims to save the company or its business, or to get a better result for creditors than an immediate liquidation, and usually ends in a deed of company arrangement or a liquidation. Receivership is a creditor's remedy: a receiver appointed by a secured creditor takes control of the charged assets to recover the secured debt.
Choosing the right procedure early protects value. We advise directors and creditors on that choice and on its timing.
Solvent winding up
A company that can pay its debts can be wound up by its shareholders. The directors certify its solvency, the shareholders pass the resolution and a liquidator is appointed to collect the assets, pay the creditors and return the surplus to shareholders. This is the usual route for closing holding companies, special purpose vehicles and funds at the end of their life. Shaheena Carrim acts as liquidator in these matters, in her personal capacity as Insolvency Practitioner.
Administration and restructuring
When a company is under pressure but its business is worth saving, administration gives it breathing space. A moratorium stops most creditor action while the administrator investigates and puts proposals to creditors. A deed of company arrangement can then compromise debts and let the company trade on. Outside a formal procedure, we negotiate standstill agreements, debt rescheduling and compromises, and structure schemes of arrangement that bind dissenting creditors once approved by the court.
Creditors, recovery and directors' liability
For creditors, we serve statutory demands, present and oppose winding-up petitions, enforce security and lodge claims. For office-holders, we investigate the company's affairs and bring recovery claims: preferences, transactions at an undervalue, voidable charges and claims against directors. For directors, we advise on their duties when solvency is in doubt and defend claims brought against them.
Frequently asked questions
What is the difference between liquidation and administration?
Liquidation ends the company: assets are realised, creditors are paid in order of priority and the company is removed from the register. Administration aims to rescue the company or its business, with a moratorium on creditor action while proposals are put to creditors.
Can a solvent company be wound up voluntarily in Mauritius?
Yes. In a shareholders' voluntary winding up, the directors confirm the company can pay its debts, the shareholders resolve to wind it up and a licensed Insolvency Practitioner is appointed as liquidator under the Insolvency Act 2009.
What is a statutory demand?
A formal demand by a creditor for payment of a due debt, served under the Insolvency Act 2009. If the company does not pay or settle the debt within the time allowed, it is presumed unable to pay its debts and the creditor can petition for its winding up.
Can directors be personally liable when a company becomes insolvent?
Yes, in specific cases. A liquidator can pursue directors for breach of duty, for allowing the company to trade in a way that caused serious loss to creditors, and for fraudulent conduct. Directors who take advice early reduce that risk.
See also our pages on financing and security and dispute resolution.