A commercial development company I’ve been dealing with has gone into liquidation. I have a mortgage over the property they’ve been developing but since the property is only half built I won’t be able to sell it for the full value. Where do I stand?
Lawyer Answers (1): Answers from lawyers are general preliminary responses. They are not formal legal advice and cannot taken account of all your circumstances. They do not create a lawyer–client relationship.
Answer by Kelly Angus, Adelaide 5000 SA
- Generally speaking the rights of a secured creditor are not affected by the liquidation as you can appoint a receiver to sell the secured asset for your benefit.
- However as a secured creditor you may be able to prove in the liquidation that a shortfall in the amount owed has occurred. This is where the proceeds of sale of the secured assets are insufficient to repay the debt owed by the company. You can then apply to the liquidator for the shortfall amount.