Under New Zealand law (Cryptopia is a New Zealand registered company) a liquidator takes control of all of the company’s unsecured assets, which are then sold to repay its creditors. Liquidation offers the company protection from unsecured creditors as they can’t take legal action against a company in liquidation or deal with its property unless they have permission from the Court or the Liquidator. When the liquidation is complete, the company is removed from the Companies Office Register.
In a posting on its homepage Cryptopia says;
“David Ruscoe and Russell Moore from Grant Thornton New Zealand were yesterday appointed liquidators of Cryptopia. Despite the efforts of management to reduce cost and return the business to profitability, it was decided the appointment of liquidators was, in the best interests of customers, staff and other stakeholders.
The liquidators are focused on securing the assets for the benefit of all stakeholders. While this process and investigations take place, trading on the exchange is suspended.
Given the complexities involved we expect the investigation to take months rather than weeks.”
The liquidators are also working with independent experts and the relevant authorities with regards to the company’s obligations. Grant Thornton will be contacting all customers and suppliers about its appointment in the next few days. Further enquiries, please email liquidation@cryptopia.co.nz”
In a statement on its website, liquidators Grant Thornton says “We realise Cryptopia’s customers will want to have this matter resolved as soon as possible. We will conduct a thorough investigation, working with several different stakeholders including management and shareholders, to find the solution that is in the best interests of customers and stakeholders,” says David Ruscoe. An initial report will be available on the New Zealand Companies Office website next week. No further comment will be made until more information is available.”
According to the NZ government’s Insolvency and Trustee service, the priority for payment for any recovered money in a liquidation is;
- liquidator fees, expenses and remuneration
- costs awarded by the court to the applicant creditor
- costs and claims of a creditor who has assisted the official assignee in the recovery of assets
- actual ‘out-of-pocket’ expenses of any liquidation committee
- wages owed to employees for the four month period prior to the liquidation and all holiday pay and redundancy payments up to a specified maximum amount
- preferential taxes collected for inland revenue including gst, paye, employee deductions for child support and other taxes
- all other unsecured creditors.