Assume that two years have passed since the events set out in (b). In the first month of those two years, North completed a number of acquisitions of restaurants, borrowing 800,000 from Kinda under the terms of an intra-group loan to finance them. However, the acquisitions proved to be something of a disaster, with a number of the restaurants purchased in unsuitable locations or subject to onerous leases. Kinda became concerned that the 800,000 sum due to it under the intra-group loan was at risk. The terms of the security in favour of the Bank to secure the RCF prevented Kinda from taking any fixed security over Norths properties, so, in the tenth month of the first of those two years, it decided to take a floating charge over the whole of Norths undertaking as security for the sums due. Eight months after that (and therefore six months ago), it became apparent that North was incurring heavy losses. By this time, trade creditors of North were pressing for payment and threatening to discontinue supplies if they were not met. HMRC was pressing for payment of unpaid VAT and National Insurance of over 150,000. Some of Norths employees had been asked to work overtime for free. To help North meet its liabilities as they fell due, South agreed to purchase two of Norths properties at their book value of 300,000 and to licence them back at a market rent. 200,000 of the sums raised by the sale were used to meet the most urgent claims of the trade creditors, and 100,000 was used to reduce the sums owed to Kinda under the intra-group loan. However, trading continued to deteriorate and, on advice from its accountants, North went into creditors voluntary liquidation last week. Barry Bitterne and Mei Maybush of RH Accountancy LLP were appointed as the liquidators of North. They estimate that the net liabilities of North grew from around 100,000 a year ago to 800,000 at the time it went into liquidation. (c) Advise the liquidators of North in connection with the adjustment of transactions prior to North going into liquidation, including identifying any further facts they may wish to determine and information they may wish to obtain. DOCUMENT C Balance Sheet of South Fixed assets Goodwill and intangible assets 100,000 Land and buildings 2,000,000 Current Assets Inventory 200,000 Debtors 100,000 Cash at bank and in hand 100,000 400,000 Creditors: amounts falling due within one year Finance creditors (50,000) Trade creditors (250,000) (300,000) Net Current Assets 100,000 Total Assets less Current Liabilities 2,200,000 Finance creditors: amount falling due after more than one year (1,450,000) Net Assets 750,000 Capital and reserves Share capital 1,000 Share premium account 99,000 Profit and loss account 650,000 750,000