The XYZ textile private company was a well-established business, and considered as a pioneer in textile sector for almost 15 years. The year 2009 was proved to be a bad financial year for the company. The company lost 70% of its shares, customers as well as some of its creditors and became insolvent by the court.
The Managing Director of the company MR. Yasir was suggested by the company’s creditors to wind up the company as their chances of survival were slimmed to none. But Mr. Yasir did not want to let his company wind up because the company enjoyed an excellent financial position in the past years and he believed an honest approach of creditors would be better as he was trying to maximize the interest of creditors. Mr. Yasir suggested his creditors to appoint a lawyer to represent the company in the court and help them striking out the petition.
Being the student of Business & Labour law, what do you think, should the company wind up the business or not? Support your answer with solid reasons. What would be the reasonable suggestions from your side to stop the business wind up?
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The company should windup there business. The company lost 70% of its shares, customers as well as some of its creditors and became insolvent by the court.There is no chance that company could progress. The company should hire a liquidator to dissolve the company in a proper way.