A liquidator is entitled to receive remuneration at 2% on the assets realized, 3% on the amount distributed to Preferential Creditors and 4% on the payment made to Unsecured Creditors. The assets were realized for ₹18,50

CS Professional · Corporate Restructuring, Insolvency, Liquidation & Winding-up · PYQS · December 2021
A liquidator is entitled to receive remuneration at 2% on the assets realized, 3% on the amount distributed to Preferential Creditors and 4% on the payment made to Unsecured Creditors. The assets were realized for ₹18,50,000 against which payments were made as follows Amount in ₹ Liquidation Expenses 18,000 Secured Creditors 7,50,000 Preferential Creditors 82,000 The amount due to Unsecured Creditors 12,00,000 You are asked to calculate the total remuneration payable to the Liquidator.

Answer & Explanation:

Calculation of remuneration payable to Liquidator Step I: Calculation of amount available for unsecured creditors Particulars Amount (₹) Assets realised 18,50,000 Less: Liquidation expenses 18,000 Payment to Secured Creditors 7,50,000 Payment to Preferential Creditors 82,000 Amount available for unsecured creditors 10,00,000 Step II: Calculation of Remuneration to Liquidator Particulars Amount (₹) Remuneration on realisation of assets (2% of ₹18,50,000) 37,000 Remuneration on amount distributed to Preferential Creditors (3% of ₹82,000) 2,460 Remuneration on payment made to Unsecured Creditors (₹10,00,000 * 4/104) 38,462 Remuneration payable to Liquidator 77,922

Topics: Insolvency and Bankruptcy Code, 2016

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