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What is the point of suing a liquidated company

  • 19-06-2020 7:58pm
    #1
    Bikerman2019
    Closed Accounts Posts: 992 ✭✭✭


    Read an article online recently and dont quite understand it.


    What is the potential benefit of suing a company, 6 years after it was liquidated? What could someone benefit from a possible win? I just dont undertand what the benefits could be.


    Thanks folks


Comments

  • #2
    L1011
    Registered Users, Registered Users 2 Posts: 71,140 ✭✭✭✭L1011


    I presume you're referring to the Lotto case?

    I believe the company in question is in liquidation, not liquidated.


  • #3
    Bikerman2019
    Closed Accounts Posts: 992 ✭✭✭Bikerman2019


    Yes.
    I appear to not understand the difference between in liquidation and the term liquidated

    So assuming in liquidation means the assets are not yet distributed, the goal would be to claim some of the assets?


    If so, after 6 years why would any company still have assets?


  • #4
    Victor
    Registered Users, Registered Users 2 Posts: 78,577 ✭✭✭✭Victor


    Bikerman2019 wrote: »
    If so, after 6 years why would any company still have assets?
    Possibly yes. Assuming it is a shareholders winding up, there are likely to be net assets. If its a creditors winding up, there is likely no net assets.

    If there is a shareholders winding up and the company is being sued, it would likely be improper for the directors / receiver to distribute the assets below the amount being sought.

    One can also have a situation where the plaintiff is suing a company, but they are really chasing the insurer behind that company (or indeed the shareholders in the event it is an unlimited company).


  • #5
    hullaballoo
    Administrators, Entertainment Moderators, Social & Fun Moderators, Society & Culture Moderators Posts: 18,773 Admin ✭✭✭✭✭hullaballoo


    There are many reasons to sue a company in liquidation or a company that has been dissolved.

    Most people don't know this but a company that has been dissolved may have substantial assets it has first dibs on notwithstanding that it has been dissolved.

    In that case, and as pointed out by Victor, where the suit is to seek to bring an insurance company to bear, it makes complete sense to sue a company that is dissolved.

    You could also sue for example for declaratory relief as against the company if you have a dispute in respect of which such declaratory relief may be granted.


  • #6
    ted1
    Registered Users, Registered Users 2 Posts: 23,896 ✭✭✭✭ted1


    They may have a valid insurance policy


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  • #7
    Victor
    Registered Users, Registered Users 2 Posts: 78,577 ✭✭✭✭Victor


    Oh, there may also be companies that are nominally worth nothing but have material assets.

    For example, just before the recession a developer bought a farm from a farmer near Naas for about €20 million. The wheels came off the bus and the farmer bought it back for about €500,000.

    Now, if the developer had been able to afford to keep the property, that site might now (pre-COVID-10) be worth, say, €30 million.

    Similarly, assets of a company is normally recorded at purchase price or current value, whichever is the lower. This might mean a property bought 50 years ago for €50,000 and recorded in the accounts as such is actually worth many millions.


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