Execon Pty Ltd is a business that sells computer parts and systems. Due to the economic damage caused by Covid-19, Execons sales have plummeted. Once a highly profitable business, their position has deteriorated rapidly. Execon is trying to keep all creditors happy, but is struggling to pay all of its bills on time. Of note is one of its suppliers, Mapple Ltd, who supply Mapple branded products for sale. Mapple is becoming increasingly frustrated by the lateness of Execons payments. Mapple offers 30-day payment terms, but Execon regularly pays 45, 60, and sometimes even 70 days later. Mapple is also becoming increasingly frustrated by the delaying tactics employed. Execon has regularly issued post-dated cheques, which sometimes bounce, and will make up excuses such as we have to talk to our bank to extend our overdraft. Execons accountants are working long hours to ensure the company has regular updates on its cash position. As at June 15^th, 2021, Execons bank accounts are empty and it has a liquidity ratio of 0.7. Whilst this ratio has fluctuated over the past year, it is currently sitting at a historical low for the company.

With Execons account now having been in arrears for 90 days, Mapple demands payment by the 1^st of July 2021, or it threatens to cut off supply. Fortunately for Execon, its bank approves an extension of its overdraft and therefore Excon promptly repays Mapple in full before the due date. Whilst getting Mapple off of their back is a welcome change, Execon has once again exhausted its overdraft and the business is rapidly entering the quieter part of the year where sales decline dramatically. By the 1^st September, Execon is in arrears again and it has been told it will receive no further extensions to its overdraft. Totally fed up with Execon, Mapple issues a Statutory demand for the sum of $5,000 and gives Execon until the 15^th of September to pay up. Execon notes that it believes the debt is only $750 as it rejected most of its last order from Mapple due to declining sales and still having most of the products in stock. It asserts that it is not contractually bound to pay the other $4250.

1. Advise Execon whether Mapple can compulsorily wind up the company. (15 Marks)
2. Assuming Execon enters liquidation on the 22^nd September, would the liquidator have any claim against Mapple? For the purposes of this question, it is projected that unsecured creditors will receive 10 cents of every dollar they are owed. Mapple, having been paid in full in July, is likely to receive 90 cents of every dollar it is owed by Execon. Please consider any defences Mapple might have. (10 Marks)