BUSINESS AND CORPORATIONS LAW
Homework Help - Q X Homework Help - Q X A Current Students - A X A Course: Business and X BACC2003 BCL Final X Post Attendee - Zoor X + X C @ File | C:/Users/upash/Downloads/BACC2003%20BCL%20Final%20Assessment%20Questions.pdf U . . . QUESTION 2 10 MARKS Sean has taken over his father's home loans business, Auzzie Loans Pty Ltd. There are three directors (Sean and his parents), who are also members of the company. When the global financial crisis hit, it was hard to persuade people to purchase new homes and his company was running at a loss for several months. Sean's creditors, namely Dud Bank Lid and its landlord, GFC Lid, are nervous about their prospects of recovering monies owed to them. Dud Bank has the security over the loan of the building that is owned by Auzzie Loans Pty Ltd. Assume that the company is not insolvent as yet. Answer the following questions (each) a. Advise Sean on what external administration procedures/options might be available to Auzzie Loans Pty Ltd. Explain how each of the procedures would apply to Auzzie Loans Pty Ltd and how it would impact on its creditors and Board of Directors. 2 marks b. A few months later the company is now hopelessly insolvent and placed under voluntary administration? What are the effects on creditors, including secured creditors - Dud Bank Lid during voluntary administration? 2 marks c. If Auzzie Loans Pty Ltd were to enter into a Deed of company arrangement, what matters does it cover? Explain what is a deed of company arrangement and what are its objectives? 2 marks d. Dud Bank Lid had appointed a receiver to recover the money owed by Auzzie Loans Pty Ltd. The appointed receiver took control of the building and placed it on the market for sale by tender. Dumbster Lid, a related entity of the receiver was tipped off the prices submitted by other prospective buyers and won the tender. Dumster Ltd secured ownership of the building a few months later and is over the moon with the deal while Auzzie Loan debt were discharged by Dud Bank Lid. Explain the role and duties of the receiver and whether the receiver has discharge it duties in accordance with the law. 2 marks e. The appointed liquidator for Auzzie Loans Pty Lid has identified the following transactions and wishes to know if they are voidable: (in your answer, explain why the transactions areot voidable). i. A payment was made to GFC Lid for $15,000 of rent. GFC Ltd (the landlord) is a company owned and run by a close friend of one of the directors who admits that he paid more than market value for rent and GFC Lid is likely to have obtained less if it had to prove in a winding up. (1 mark) ii. A loan was given by Dud Bank to the company at market interest rates. (1 mark) Type here to search W ENG 6:05 PM 12/10/2020
