LIQUIDATION

In cases where none of the other instruments of debt relief can be used, we resort to liquidation.
In essence, under liquidation, all the assets of the business are sold and the proceeds of the sale are used to pay the creditors. Whether or not the proceeds of the sale are sufficient to pay the full amount of all the debts, the creditors’ claims are regarded as having been settled in full.
The value of the debtor’s assets must be sufficient to pay the costs of the liquidation.
This remedy is not a remedy aimed at helping the debtor. It is aimed at protecting the interests of the creditors. As such, it must be shown that it is in the creditors’ interests to liquidate the business concerned. They must get something out of the procedure.
Whereas in the case of private individuals, the person concerned continues to exist after sequestration, in the case of the liquidation of a business, the company or close corporation ceases to exist.

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