Section 293 of Companies Laws, CAP. 113 ("CAP. 113") provides for the power of Cypriot Courts to issue an order for the placement of a voluntary liquidation of a Cypriot company under Court's Supervision, upon the application of the company's creditors or shareholders, and subject to terms to be fixed by Court, as it deems just.
The creditors, who have locus standing under Section 213 of CAP. 113 to petition the winding up of a Cypriot company, have locus standing to file a petition for an order that the voluntary liquidation of a company continues subject to the supervision of Court as per Section 293 of CAP. 113.
Due to lack of any Cypriot case law on the requirements to be satisfied by an applicant for the issue of a court order as per Section 293 of CAP. 113, guidance shall be sought from common law jurisdictions which have similar or identical provisions as Section 293 of CAP. 113.
In the Irish case RE LARKIN (2010) IEHC, the following requirements for the issue of such an order have been set to be satisfied by an applicant:
(a) The wishes of the majority creditor of the company;
(b) The need for the investigation of wrongdoings allegedly committed by the controllers of the company against the company;
(c) Whether the Applicant has justifiable sense of grievance (i.e. when there is evidence that the persons controlling the company have disposed assets of the company etc.);
(d) When the liquidator appointed in the context of the voluntary liquidation, is not independent, because he has been appointed by the persons controlling the company and whose wrongdoings shall be investigated by the liquidator; and
(e) The costs and time needed for completion of a compulsory liquidation in comparison to a voluntary liquidation, taking into consideration the existing assets and debts, as well as the readiness of the applicant to cover such costs etc.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.