In November 2019, Mike registered a corporation to conduct his small manufacturing business to produce carpet. One of the reasons for establishing the company was to avoid liability for potential losses. The first stockholders of the company were Mike, Kate, and Long, who each took 3,000 shares in the company, each with a nominal value of $1. Their lawyers explained that they did not have to pay the full nominal value of the shares at once, so they each paid only 25 cents per share taken, with the result that they still owed the company a further 75 cents per share to be paid at a later date. When the company was established it became apparent that it needed to borrow money from a bank to finance an expansion in production. To that end Open bank Inc. lent the company $20,000-secured by a fixed charge against the land Mike had previously transferred to the company, with an additional personal guarantee from Mike for any further debts owed by the company to the bank. Unfortunately, the business has not proved successful and Mike and the other stockholders have decided that it is better to liquidate the company rather than run up any more debts. The current situation is that the company's land is worth $20,000 and it has further assets to the value of $7,750, but it has debts to business creditors of $10,000 and owes the bank a further $10,000 on its bank overdraft. Required: Explain the rights of the various creditors and the potential liability of Mike, Kate and Long. (The actual costs of winding up may be ignored.)