Which power is within a liquidator's remit?

Which power is within a liquidator's remit?

• A. To investigate intra-group transfers of assets or sales to a third party where they occur at an undervalue.
• B. To appoint a new chief executive without court involvement.
• C. To extend the company's administration period beyond statutory limits without court approval.
• D. To create new debt obligations on behalf of the company.

Answer: (A)

The liquidator’s role includes examining the company’s past dealings to protect creditors’ interests, especially by identifying and addressing transactions that have transferred value away for less than it’s worth. A key power is to scrutinize transfers at undervalue, whether within the group or to a third party, because those transactions can be voidable and allow the liquidator to recover assets for distribution to creditors. This helps maximise the funds available when winding up. The other options involve actions that aren’t within a liquidator’s solo remit: appointing a new chief executive without court involvement is a management decision; extending the administration period beyond what statute allows requires court approval; and creating new debt obligations on behalf of the company contradicts the purpose of liquidation.

The liquidator’s role includes examining the company’s past dealings to protect creditors’ interests, especially by identifying and addressing transactions that have transferred value away for less than it’s worth. A key power is to scrutinize transfers at undervalue, whether within the group or to a third party, because those transactions can be voidable and allow the liquidator to recover assets for distribution to creditors. This helps maximise the funds available when winding up. The other options involve actions that aren’t within a liquidator’s solo remit: appointing a new chief executive without court involvement is a management decision; extending the administration period beyond what statute allows requires court approval; and creating new debt obligations on behalf of the company contradicts the purpose of liquidation.