The liquidation process involves selling your company's assets to release funds to repay creditors (and cover the liquidator's fees).
If you’re a director considering liquidation, you may be wondering whether a fair price can be achieved, how the sale process works, and whether buying assets from a liquidator – even your own company – is possible.
This guide answers all of these questions to help you get clarity when you’re in financial difficulty – and make the right decisions for your situation.
Unsure which path is right for you? See our full guide:
Voluntary administration vs liquidation
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Liquidators must maximise returns
Just because assets are being sold in an insolvent company liquidation doesn’t mean they’re sold for next to nothing.
In fact, liquidators have a legal duty to maximise the returns to creditors when realising a company’s business assets. This means achieving the best outcome they can reasonably get in the circumstances.
This doesn’t necessarily mean the highest offer on the table. They have to weigh up the whole deal. An offer that’s unconditional and settles quickly might be the better outcome overall.
To boost creditor realisations, the liquidator selects the method of sale based on the type of asset, the urgency and the likely buyer pool.
Common methods include public auction, expressions of interest (EOI), private treaty, online liquidation platforms and going-concern sales.
Unclear on the liquidation process?
Read our step-by-step guide: Creditors voluntary liquidation process
Sale methods in creditors' voluntary liquidation
Here’s a more detailed look at the main methods used when buying assets from a liquidator, how they work and what types of assets they’re suitable for:
Sale method | How it works | Typical asset types |
Public auction | Assets are listed with an auction house and sold to the highest bidder on auction day. Often the fastest method. | Plant, equipment, vehicles, furniture, stock |
Expressions of interest (EOI) | Interested buyers submit written offers by a deadline. The liquidator assesses all offers and selects the best overall outcome – not necessarily the highest price. | Going-concern businesses, significant single assets, intellectual property |
Private treaty | The liquidator negotiates directly with one or more buyers. Used when a specific buyer has been identified, or the asset requires a bespoke sale process. | Specialised equipment, business goodwill, real property |
Online liquidation platforms | Assets are listed on specialist liquidation sale platforms. Accessible to a wide buyer pool with minimal friction. | General stock, office equipment, small plant items |
Going-concern sale | The entire business (or a significant part of it) is sold as an operating entity to a new owner. Preserves jobs and business relationships. | Businesses with ongoing customer relationships, branded operations, service businesses |
Asset price drivers in liquidation
Knowing what drives prices in a liquidation asset sale – and why they often sell for less than expected – can help set realistic expectations before the sale happens.
Importantly, the price achieved isn’t based solely on liquidator performance.
Here are some of the main factors that impact it:
Asset condition and marketability – Well-maintained current-model equipment can achieve a much better price than aged or specialised plant.
Market timing and buyer pool – Fewer buyers in the market equal less profit potential. Specialist or niche assets may take longer and need a targeted EOI process.
Urgency of realisation – If assets need to be sold quickly (perishable stock, leased premises), this can limit the price compared to a more considered sale.
Going-concern premium – If your business can be sold as a going-concern (an operating business), the liquidator will usually choose this as it delivers better outcomes and preserves jobs.
The liquidator will keep you informed about the sale process and outcomes.
Your role in what happens to assets in liquidation is limited to fully cooperating with the liquidator and providing information about assets swiftly.
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Can directors buy company assets back?
‘Can a director buy back their own company assets?’ is one of the most common questions asked in a CVL. The answer is yes – under insolvency law, there’s no blanket prohibition. However, there are caveats.
Not an automatic sale – As the liquidator has a duty to maximise returns to creditors, putting in an offer as a director doesn’t mean acceptance by default. Your offer will be assessed on the same basis as any other offer.
Attracts more scrutiny – Because you’re attached to the business, the liquidator must be satisfied your offer represents fair value and is best for creditors. Undervalued transactions can be challenged.
Funding the purchase – Whatever funds you use must come from outside your company – personal savings, finance, a new entity, or a third party. Company funds belong to your secured and unsecured creditors and can't be used.
If you do want to buy back assets from your own company’s liquidation, it’s important you participate in the formal sale process, make a competitive offer and seek independent valuation advice. You also need funds readily available.
Be aware of voidable transaction risk
If assets were transferred to you, or a related party (family member, friend, associated business), in the period before liquidation below market value, the liquidator can look to undo the transaction to recover them. If this applies to you, seek legal advice early.
Dealing with specific asset types
There are some types of company assets in a creditors voluntary liquidation that raise more questions due to the specific nature of them.
Secured assets – If a creditor holds a registered security interest over an asset, for example, a bank over equipment under a finance agreement, they have priority over it as a secured creditor. This means they get paid out first.
PSRP-registered assets – Assets with a security interest (e.g. financed equipment) are recorded by the Personal Property Securities Register (PPSR). The liquidator will conduct searches to identify any, so be aware of what's registered before the process begins.
Intellectual property – IP may feel intangible and ‘yours’. But IP, such as trademarks, domain names, customer lists and software, owned by your company can be sold by the liquidator, so you must identify and disclose it.
Stock and inventory – Perishable (food, cosmetics) or fast-depreciating stock (tech, seasonal) will usually be sold quickly. You can help by providing accurate stock records and valuations.
Understanding how these different asset types are treated helps you prepare for the process – and avoid surprises when buying assets from a liquidator or seeing them sold.
Assist the liquidator for better outcomes
Assets in a liquidation are how the liquidator helps compensate unpaid creditors.
The liquidator's job is to do this professionally and aim to maximise returns. While they’re in control, as director, you may have more involvement than you thought in the selling and buying of assets from them.
The more cooperative and transparent you are with the liquidator throughout the insolvency process, the smoother it goes – and the better the outcome for everyone involved.
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