Creditors’ Voluntary Liquidation (CVL) of Charitable Trust

The Charitable Trust was established by residents to provide a framework through which social, economic, and environmental efforts in the local vicinity could be regularly monitored, reviewed, and improved upon.

It fell under the remit of the Charity to preserve, protect, and enhance local amenities and deliver community transport. The Trust was instrumental in coordinating public transport services on behalf of the elderly and disabled members of the local community.

Following suspicions of the viability of the Charity, an independent charitable review was conducted. It concluded that a string of significant financial reporting errors had occurred as a result of poor bookkeeping practices and accounting incompetence, for which the onus allegedly lied on the in-house bookkeeper.

This resulted in a vote to voluntary liquidate the Charity to immediately protect the interests of creditors and service users.

Work Undertaken

Following a referral from the Charity solicitor, we were appointed as liquidators.

Our team undertook a Creditors’ Voluntary Liquidation and a fundamental aspect of the work undertaken was to ensure service continuity of the charitable service. The CVL procedure was actively structured in a way to minimise disruption to service-users and a cessation in the Charities purpose.

Outcome

The Charity entered a Creditors’ Voluntary Liquidation following an agreement between residents. To ensure transport services would continue for the vulnerable members of society, as championed by the Trust, bus service contracts were transferred to a reputable local bus operator.

The Charity Commission also considered that the charitable purpose could continue under their framework.