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Oct 22, 2021

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Details: Creditors Voluntary Liquidation File (CVL)

Details: Creditors Voluntary Liquidation File (CVL)


The CVL File mimics what a File Accountant working in an insolvency practice would do on a daily basis when administering a Creditors Voluntary Liquidation. By completing the bankruptcy case file, not only are you applying the liquidation laws you have studied inside and outside class but also the professional skills which are expected of a File Accountant. In essence you are learning by doing, and your completed CVL File is a portfolio of your learned skills in corporate insolvency law. For example when searching advertisements for Graduate positions in Insolvency one of the selection criteria sighted was timely action on tasks. Your submission of the completed file notes on the relevant due dates is evidence of your time management skills.

The CVL file is a live document. To that end there will be additional information provided to you via the CVL file through out the trimester. Please ensure that you check the announcements on [email protected] for updates on the CVL File.


This is a progressive assessment item, meaning there are a number of submissions to be made throughout the trimester. Due dates for completion of file notes are listed on each file note. Each file note will contain approximately one or two questions or exercises to be answered on the file note. Supporting documents can be uploaded to the working papers file note.


You will be provided with a link which will give you access to the CVL File.

Please review each file note, taking note of the required completion date. If you have questions please bring them along to workshops for discussion.

Each file note will contain questions requiring short answers, or calculations, or ILAC answers, or a combination of some or all of the above. Text fields will be provided on the file note for your short answers, or ILAC answers.  Calculations and workings should be completed in an Excel spreadsheet and uploaded to the Working Papers File Note.

During the trimester as you complete each file note, please record the time you have taken to do so.

  • Separately record the time taken against each file note into an Excel spreadsheet (excluding your reflection).
  • Then multiply the total hours taken by the File Accountant charge out rate of $250.00 per hour.
  • Please upload the Excel spreadsheet into your Working Papers File Note.

The total cost represents in part the Liquidators Remuneration which once approved by the creditors is a priority payment under s556(1)(de) of the Corporations Act 2001, being a cost and expense of the liquidation.

Welcome to Creditors Voluntary Liquidation (CVL) Assessment

Gold Coast Souvenirs Pty Ltd (in Liquidation)

For the purposes of completing this authentic assessment item you are a File Accountant employed by Griffith Insolvency. Griffith Insolvency is a boutique accountancy practice which focuses on all areas of insolvency including: Solvency Management; Insolvency Administration; and Financial Investigation. The practice has over 22 partners and over 100 staff across Queensland, New South Wales, Australian Capital Territory and Victoria. Significantly Griffith Insolvency enjoys nationally a market reputation of running paperless or digital offices, having designed and developed in-house computer programs specifically for the electronic documentation of insolvency administrations  files and investigations.

The members of Gold Coast Souvenirs Pty Ltd have passed a special resolution to wind up the company and appointed Jessica Jones (Registered Liquidator and Partner of Griffith Insolvency) to act as Liquidator of Gold Coast Souvenirs Pty Ltd.

The Liquidators role is to a large extent investigative. She will examine the companys books, cash receipts, title to assets, bank accounts, and disposals of assets. The breadth of these investigations will depend upon the nature of the insolvent company, the level of co-operation provided by the directors, and most importantly the funds available. If there are no funds available, then only minimal investigations are possible.

Preliminary inquiries and actions undertaken by the Liquidator after appointment include:

  1. Freeze the company bank account/s any credit balance should then be transferred to a new account with the liquidator as the only signatory.
  2. Secure and occupy the companys premises and collect in the companys assets and arrange insurance cover.
  3. Collect the companys books and records (the company directors and accountants are obligated to assist the liquidator in this process).
  4. Ensure the directors complete the Directors Questionnaire which provides details of the companies activities to date.
  5. Arrange any creditors meetings (virtual or face to face)
  6. Collect the companys debts.
  7. Deal with the secured creditors (the appointment of a liquidator will be an event of default in most mortgages or security documents).

As the File Accountant allocated to this clients Liquidation file you will assist the Liquidator in the liquidation of this company by completing a number of tasks which are listed on the various file note pages (see the banner above) of the Gold Coast Souvenirs Pty Ltd Creditors Voluntary Liquidation (CVL) File.

Each file note task must be completed by the due date stated on the file note. File Accountants are to document the results of their investigations into the assets, liabilities (secured and unsecured) and potential breaches of the Corporations Act 2001 by company directors). Based on such investigations the Liquidator/ File Accountant will determine the amount (if any) of dividend to be paid to the companys unsecured creditors.

Wherever possible File Accountants should provide evidence (meaning work-papers, source documents) to support their investigations and link such evidence to the relevant file note.

The CVL assessment rubric criteria is available on the [email protected] site under A2 CVL Case File Assessment.

First Day Events

Maxine King ( sole director and sole shareholder) of Gold Coast Souvenirs Pty Ltd made an appointment to speak to Jessica Jones ( Partner in Griffith Insolvency) in early July last year to discuss her options.

Gold Coast Souvenirs Pty Ltd was registered over ten years ago as a manufacturer, importer and wholesaler of souvenirs & memorabilia . The company enjoyed significant success in its initial 10 years, however in the last two years the director Maxine King noticed a decline of sales as tourists to the Gold Coast concentrate on acquiring experiences , rather than souvenirs, while holidaying on the Gold Coast.

Unfortunately, Gold Coast Souvenirs Pty Ltd had at this time committed to buying two delivery vans and borrowed a significant sum of money to fund the purchase of stock from overseas. Sales continued to decline , well below budgeted figures and the unpopular stock items were considered over-valued. In a last ditch effort to get Gold Coast Souvenirs Pty Ltd on its feet again, and to ensure continued supply of materials and services from creditors, Maxine agreed to guarantee the repayment of the bank overdraft from ANZ.

However, Gold Coast Souvenirs Pty Ltd has not recovered its market position and mindful of her liability as Guarantor, Maxine thought it best to consult with Jessica Jones (Partner of Griffith Insolvency) regarding her options.

Having spoken to Jessica Jones regarding her potential legal liability for the repayment of the bank overdraft and company debts if Gold Coast Souvenirs Pty Ltd was trading while insolvent, Maxine King, as sole shareholder & director of Gold Coast Souvenirs Pty Ltd, resolved to place the company into liquidation and appoint Jessica Jones as liquidator.

Actual Assignment starts from here !!!


A liquidator will generally realise the companys assets as soon as practicable so as to enable a dividend to be paid to creditors (if possible). A liquidator has the discretion to choose from a number of sale options  private contract, public auction, tender and clearance or liquidation sale.

Jessica Jones has engaged Lloyds Auctioneers and Valuers to sell the plant & equipment, motor vehicles, and stock. Lloyds charge a commission on all stock sold of 2.5%.

Please review the Lloyds Consignment Summary for details of what was sold.

To complete this file note you need to answer the following questions. Date Due: Monday 27 September 2021 at 12.00 midday (Week 10).

1. Using an excel spreadsheet (to be uploaded to theworking papers file note) please calculate the total monies Jessica Jones will receive from the sale of unsecured assets and collection of outstanding debts of Gold Coast Souvenirs Pty Ltd (in Liquidation).

ANSWER HERE: Excel sheet required for answer


The distribution of the companys realised and recovered assets is one of the major tasks of the liquidator and of equal importance to the companys creditors. Corporations Regulations, reg 5.6.67(1) is an acknowledgement of the importance of the liquidator returning company funds to creditors as it requires that the liquidator must declare and distribute a dividend as soon as practicable. Regulation 5.6.67(2) reinforces the importance of such distribution to creditors as it provides that the liquidator must distribute as a dividend all money in hand except what is needed for administration or to give effect to the legislation.

Before declaring a dividend, however, it is necessary for the liquidator to repay the priority creditors (which can be found principally in Corporations Act s556) in full, before the remainder of the estate is distributed to the unsecured creditors applying the principle of pari passu.

The Commonwealth Department of Jobs and Small Business which administers the Fair Entitlements Guarantee (FEG) is such a priority creditor. Such priority exists due to the Department s subrogated right to recover under the FEG Act payment claims made to employees in regard to their employee entitlements.

To complete this file note you need to answer the following questions. Due Date: Monday 27 September at 12 midday (Week 10).

1a. Based on the prior file notes completed in the CVL Case file, as File Accountant prepare a Statement of Distribution of Funds which calculates how the unsecured assets recovered by Jessica Jones will be distributed to priority and unsecured creditors? You may assume that the proof of debt lodged by the Department of Jobs & Small Business for the claim paid to employees for their unpaid annual leave payments was accepted by Jessica Jones.



1b. Show all your workings in an excel spreadsheet in Working documents and separately include justifications for your answer referring to relevant case law and/or sections of the Corporations Act 2001.

ANSWER HERE (Require an excel sheet too to show the workings





The final step in a winding up is usually de-registration of the company. In a voluntary winding up de-registration of the company is an automatic consequence of completion of the liquidation.

The liquidation is said to be complete when the affairs of the company are fully wound up and the End of Administration Return is lodged with ASIC: IPSC, s70-6.

ASIC must de-register the company on the expiration of three months after the lodging of the return: ss509(1).

To complete this File Note please answer the questions below: Due Date: Monday 27 September at 12.00 midday

(Week 10).

1. What are the effects and consequences of Gold Coast Souvenirs Pty Ltd being de-registered? Please make reference to the relevant sections of the Corporations Act 2001 and relevant case law.



Working Documents

The Registered Liquidator and hence the File Accountant must provide evidence to support the decisions made in administering the liquidation of Gold Coast Souvenirs Pty Ltd (in liquidation).

Please provide a checklist of the working documents (calculations, excel spreadsheets) referred to in the various file notes in the Creditors Voluntary Liquidation (CVL) case file.

Use the  add evidence  field to attach. It is possible to attach more than one asset to any evidence field.


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