When Can You Use a Liquidation Application to Collect Debt?
When you are struggling to recover your money from a recalcitrant debtor company, applying for its liquidation can be a very powerful collection tool. Suddenly the directors are faced with the imminent prospect of completely losing control of their company, its business and its assets to a liquidator. If the directors are just fighting a rearguard action to delay paying you, a liquidation (or “winding-up”) application should immediately focus their minds on finding a way to settle the debt. But be warned – this only works with undisputed debt. The recent Supreme Court of Appeal (SCA) case of Freshvest Investments (Pty)…