(Based on Australia's Corporate Law)

Question 1

Computek Pty Ltd is a company that manufactures computers. Jason, Mark and Larry are the directors.

On 30 September 2018, one of Computek's creditors applies to the court to have Computek wound up in insolvency.

The court makes a winding up order, and appoints a liquidator on 31 October.

It seems that unsecured creditors are only likely to receive about "10 cents in a dollar".

Required:

Are any of the following transactions a "voidable transaction"? Support your answer with relevant statute law.

(a) On 30 June 2018, Computek paid Mary the full invoice amount it owed for some consulting services Mary provided to Computek. Mary is Mark's sister.

(b) On 30 January 2018, Computek sold one of their premises to David. The market value of the premises was $360,000. Computek sold it for $100,000.

Question 2

You have just graduated as an accountant and obtained a position as financial accountant with Wind Up Accountants. Your first job is in the insolvency division of the firm.

Recently the firm has been appointed as administrator by the directors of a fresh food company.

You have been asked by the partner of the accounting firm to prep a paper to be handed out to the directors of the company.

In the paper you will need to advise the directors of the following matters:

(a) What are the consequences for the directors of the company going into administration?

(b) There are two secured creditors, one being the bank which has a non-circulating charge and one being the supplier of fresh fruit and vegetables which has a circulating charge. What are their rights and can they exercise their security and recover their funds?

(c) What is the purpose of a deed of company arrangement?