Insolvency Administration problem question

Paul has a trucking business with 52 semi-trailers in its fleet. He has operated the business for 10 years and it has grown from a small concern to a medium size company. Paul has contracts with several large businesses delivering goods around Australia. The company has offices in three states and the head office is in Melbourne. The name of the company is "Trucking for business Pty Ltd". The pandemic has really affected Paul's business. The lock down in Victoria has prevented the movement of goods from that state to several other states who only permit essential items to be allowed in. Paul's clients use Paul's company to transport non-perishable items like furniture, building supplies, medical equipment and tyres. Paul has about 40 main clients on his books. Contracts with Paul's clients are based on 30-day terms. Once Paul delivers the goods the client has 30 days in which to pay the invoice. Since April 2020, several of Paul's clients have not been able to pay Paul's invoices and have asked for payment extensions. As of 21 October 2020, Paul is owed $250000 which has been outstanding for up to 6 months. A company called "Tyre Power Pty Ltd" who uses Paul's business to transport tyres around the country owes Paul's business $80000 and is 5 months in arrears. "Jack's Furniture Pty Ltd" owes Paul's business $25000 and is 4 months in arrears. "Jim's Trading Pty Ltd" owes Paul's business $25000 which is 5 months in arrears. "Tim's plumbing Pty Ltd" owes Paul's business $20000 which is 3 months in arrears. "Gary's Electrical Pty Ltd" owes Paul's business $30000 and is 5 months in arrears. These are some of Paul's major clients who owe him money.Paul has several creditors of his own and currently owes them $900000. Most of these creditors are unsecured creditors but one main one is his bank "Easy Money Pty Ltd" who lent Paul $600000 2 years ago to enable him to set up his business. "Easy Money Pty Ltd" has perfected a security interest over his trucks as security for the loan. This is a circulating security interest as opposed to a non-circulating one. Paul is 6 months behind on his payments. Paul has also borrowed money from "Friendly Finance Pty Ltd" who has lent him $100000 over his trucks. "Friendly Finance Pty Ltd" has not perfected the security interest over the trucks. This money was used to pay staff as he was low on funds. Paul is also 6 months behind on the repayments for this loan. This week

"Cheap Money Pty Ltd" lent Paul $60000 over his trucks to cover bills but the loan was not perfected either. In January this year, Paul got engaged to his sweat heart of 6 years and because he was short on money used company funds to buy his girlfriend a gold ring. This cost $5000. At the same he bought her a new car valued at $25000 with company funds and because he become desperate took out a loan in the same month from a local loan shark for $20000 at 40% interest. This money was used to pay one supplier in full because he was threatening to sue Paul if he was not paid. In September this year, Paul borrowed $100000 over one of his premises he uses to park his trucks. "Happy Bank Pty Ltd" lent Paul this money and holds a non-circulating security interest over the premises. Paul owns this premises outright and by borrowing against it prevents other creditors from getting their hands on it as the bank now has the title deeds to the building which are used as security for the loan. Paul comes to you for advice on whether he should declare himself bankrupt and if so, how should he go about it? Also advise any creditors if they have an action against Paul personally and what they can do to get their money back? Will these creditors be successful? Should Paul also appoint a voluntary administrator to his trucking business and if so what are the chances of his business being put into liquidation or is their some hope his business could be restructured and a deed of company arrangement entered into? If you advise on winding up examine any possible voidable transactions that may have occurred and if these can be wound back? Also advise any secured creditors if they should appoint a receiver and what they should ensure they do when dealing with company property especially when it comes to selling the property to recovery what is owed to them.

Outline as much detail as you can about the process required for each type of recovery action. Deal with each action separately. Refer to all relevant sections of any relevant Act and or case to assist you with your advice. Firstly, identify all legal issues and then identify the law before you apply the law to the facts. Arrive at any conclusions you think appropriate.

following the HIRAC method.