Liquidation marks the “corporate death†of a company. After paying the costs and expenses of the liquidation, the liquidator will distribute the net proceeds realised from the company’s assets to creditors subject to a statutory order of priority.
A franchisee would not usually be owed monies by a franchisor, although where a national account business is operated a franchisee may be due credits from the franchisor. However, unless monies have been kept in a separate designated deposit account in the franchisee’s name, it is unlikely that the liquidator can pay them over.
The franchisee would be left to lodge a claim for the monies as an unsecured creditor. Full article.