Editing Liquidation (section)

==Priority of claims==
{{see also|Secured creditor|Preferential creditor|Unsecured creditor}}
The main purpose of a liquidation where the company is insolvent is to collect its assets, determine the outstanding claims against the company, and satisfy those claims in the manner and order prescribed by law.

The liquidator must determine the company's title to property in its possession. Property which is in the possession of the company, but which was supplied under a valid [[retention of title clause]] will generally have to be returned to the supplier. Property which is held by the company on [[trust law|trust]] for third parties will not form part of the company's assets available to pay creditors.<ref>See for example, ''[[Quistclose trust|Barclays Bank v Quistclose]]'' [1970] AC 56.</ref>

Before the claims are met, [[secured creditor]]s are entitled to enforce their claims against the assets of the company to the extent that they are subject to a valid [[security interest]]. In most legal systems, only fixed security takes precedence over all claims; security by way of [[floating charge]] may be postponed to the [[preferential creditor]]s.

Claimants with non-monetary claims against the company may be able to enforce their rights against the company. For example, a party who had a valid contract for the purchase of land against the company may be able to obtain an order for [[specific performance]], and compel the liquidator to transfer title to the land to them, upon tender of the purchase price.<ref>''Re Coregrange Ltd'' [1984] BCLC 453.</ref>

After the removal of all assets which are subject to retention of title arrangements, fixed security, or are otherwise subject to proprietary claims of others, the liquidator will pay the claims against the company's assets. Generally, the priority of claims on the company's assets will be determined in the following order:
# Liquidators costs
# Creditors with fixed charge over assets
# Costs incurred by an administrator
# Amounts owing to employees for wages/superannuation
# Payments owing in respect of worker's injuries
# Amounts owing to employees for leave
# Retrenchment payments owing to employees
# Creditors with floating charge over assets
# Creditors without security over assets
# Shareholders ([[Liquidating distribution]])

Unclaimed assets will usually vest in the state as ''[[bona vacantia]]''.