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Chapter 11

Application of assets

The liquidator must repay debts in the following order:

 Fixed charge-holders

 Expenses of liquidation

 Preferential creditors

– Wages or salaries due to employees in the four months preceding the
commencement of winding up

– All accrued holiday pay

– Employee’s occupational pension contributions

(All preferential creditors rank equally amongst themselves)

 Floating charge-holders (However, a certain percentage of assets are ring-
fenced for unsecured creditors)

 Unsecured creditors – rank equally amongst themselves

 Post-liquidation interest

 Members – declared but unpaid dividends

 Members – return of capital (in accordance with class rights)

 Any surplus to be distributed to members.

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