A shortfall must be established by comparing available funds with all known liabilities as of the current date. On the asset side, cash, collectible receivables, and realistically achievable proceeds from asset disposals must be recorded. These must be compared with admitted and still-disputed creditor claims, security interests, winding-up costs, and other expected payments. Book values alone are not enough if assets can be sold only after a delay or for lower proceeds. As soon as a gap becomes apparent, the cash-flow plan must be updated and payment due dates taken into account. Payments to individual creditors must not continue without checking the applicable order of priority. The liquidator should document the cause, amount, and expected development of the shortfall in a way that can be followed. At the same time, it must be determined whether insolvency already exists or is foreseeable. If the assessment shows that the voluntary liquidation cannot be continued in an orderly manner, the applicable rehabilitation or insolvency route must be determined. Any potential creditor losses can be reliably assessed only after examining the assets, order of priority, security interests, and proceeds actually available.
Shortfall in the liquidation of a company in Georgia
A shortfall exists in the liquidation of a company in Georgia when the available liquidation estate is unlikely to be sufficient to meet all liabilities. In this case, further payments must be controlled, and insolvency as well as a possible transition to bankruptcy or other insolvency proceedings must be assessed.
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