Requirements for claim for sequestration/liquidation

In order to claim the liquidation of a company or the sequestration of a trust or individual person it is necessary to show that the target is the claimant’s debtors and the target is insolvent. The claim must be a liquidated claim because a damages claim yet to be proved cannot found an application for liquidation/sequestration. Liquidation/sequestration is not the appropriate remedy for resolving a dispute about a debt. The predominant purpose of a liquidation/sequestration is the bona fide achievement of the benefits of the insolvency process. Liquidation or sequestration is often unjustifiably threatened when a debt is disputed so this judgment is a welcome reminder of the requirements. The case is Osborne v Cockin NO & Others.

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