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Liquidation

The order of Distribution in liquidation, following the realisation of security by fixed charge secured creditors for their benefit, is as follows:

1. •

   where liquidation occurs within 12 weeks of a moratorium, any moratorium debts and ‘priority pre-moratorium debts’ for which the company did not have a payment holiday during the moratorium but which were not paid

2. •

   expenses properly incurred in the winding up (including the remuneration of the liquidator)

3. •

   ordinary preferential debts

4. •

   secondary preferential debts

5. •

   the prescribed part for unsecured creditors (where not disapplied)

6. •

   debts secured by floating charges

7. •

   unsecured debts

8. •

   statutory interest

9. •

   postponed debts (ie non-provable liabilities)

10. •

    return of any surplus to members (subject to adjustment between members)

For further information, see Practice Note: Waterfall of payments in liquidation.

Administration

The order of distribution of a company’s assets in administration (when the administrator has permission from the Court to distribute) is as follows:

1. •

   debts secured by fixed charges

2. •

   where administration occurs within 12 weeks of a moratorium, any moratorium debts