Creditors’ Voluntary Liquidation (CVL) of Charitable Trust

Company Liquidation

| November 3rd 2021

More Case Studies by Paul Barber

Updated: 3rd November 2021

Creditors’ Voluntary Liquidation (CVL) of Charitable Trust

Background

The Charitable Trust was established by residents to provide a framework through which social, economic, and environmental efforts in the local vicinity could be regularly monitored, reviewed, and improved upon.

It fell under the remit of the Charity to preserve, protect, and enhance local amenities and deliver community transport. The Trust was instrumental in coordinating public transport services on behalf of the elderly and disabled members of the local community.

Following suspicions of the viability of the Charity, an independent charitable review was conducted. It concluded that a string of significant financial reporting errors had occurred as a result of poor bookkeeping practices and accounting incompetence, for which the onus allegedly lied on the in-house bookkeeper.

This resulted in a vote to voluntary liquidate the Charity to immediately protect the interests of creditors and service users.

Work Undertaken

Following a referral from the Charity solicitor, we were appointed as liquidators.

Our team undertook a Creditors’ Voluntary Liquidation and a fundamental aspect of the work undertaken was to ensure service continuity of the charitable service. The CVL procedure was actively structured in a way to minimise disruption to service-users and a cessation in the Charities purpose.

Outcome

The Charity entered a Creditors’ Voluntary Liquidation following an agreement between residents. To ensure transport services would continue for the vulnerable members of society, as championed by the Trust, bus service contracts were transferred to a reputable local bus operator.

The Charity Commission also considered that the charitable purpose could continue under their framework.


About the author

Paul Barber

Partner

Meet our Team of Experts

A Licensed Insolvency Practitioner with an MBA degree, Paul joined the Manchester office of Begbies Traynor in 2009. Prior to joining, Paul was working at Dawson White, the IVA provider for an OFT approved debt management company. Paul also spent 11 years at Baker Tilly with two secondments with Motor Retail lenders, including Ford Financial. He has extensive experience of all insolvency procedures and also has a background in property based on his RICS accredited BSc Land Management degree.

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