SCHEDULE D - CREDITORS HOLDING SECURED CLAIMS - Forms 2025

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When a company is liquidated, the assets are sold and the profits are used to repay any creditors and shareholders. The reason why the assets are sold is because when a company enters liquidation, it typically does not have enough capital to pay off its debts.
A secured creditor, unsecured creditor or equity security holder must file a proof of claim or interest for the claim or interest to be allowed, except as provided in Rules 1019(3), 3003, 3004, and 3005.
Key Takeaways. If a company is liquidated, all of its assets are distributed to its creditors based on a pre-determined priority order. Secured creditors are first in line, as their claims are often secured by collateral and contracts.
A creditor whose debt is secured has a legal right to take the property as full or partial satisfaction of the debt. For example, most homes are burdened by a secured debt. This means that the lender has the right to take the home if the borrower fails to make payments on the loan.
Secured creditors rights appoint an independent and suitably qualified person (a receiver) to take control of and realise some or all the secured assets in order to repay the secured creditors debt. This right continues after the company goes into liquidation (see INFO 54)
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Section 53(1)(b) of the Code states that in the liquidation waterfall, secured creditors who give up their security interest are given the second-highest priority and are entitled to recover their dues in the same way as labourers.
Secured creditors are paid first as they are usually those who have security over some or all of the company assets. The secured creditor will take back the property theyve secured, or will be entitled to the proceeds from the liquidation of that specific property.

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