Company Law

Question

Better bank created a fixed charge over the entire present and future assets of the company on the 1st of April 2002. The charge was registered 10 days after it was created. One of the terms was that the company may continue to use the assets in its ordinary course of business. Risk bank subsequently created a floating charge over the same assets which, was registered 5 days after its creation. A term of the charge stated that the charge will become fixed if the funds in the companys current account with Risk bank go below $2million. The account was withdrawn leaving a balance of $500,000 on the1st of September. The company owes a supplier $1million and has not filed GCT returns for the last five years. Better bank recently appointed a receiver because the company has fallen behind in servicing its loan.

i. Advise the shareholders on the nature of their shares, the payment of dividend, and the validity of the transfer of shares. ii. Advise the receiver on priority of charges