Simplified liquidation (also known as a simple liquidation) is one of two new formal insolvency processes introduced by the Federal Government. Along with the new Small Business Restructuring process, simple liquidation is designed to help struggling businesses resolve their financial distress in the wake of the COVID-19 pandemic. The simplified liquidation process reduces both the cost and time involved in completing a company’s liquidation, providing relief for business owners and creditors more rapidly than other liquidation processes.
A simplified liquidation is a type of creditors’ voluntary liquidation (CVL). The process can be adopted once a company has been placed into a CVL where the company meets certain eligibility criteria.