PF Pty Ltd is a family owned company that runs a motor mechanic business. The company has a debt of five hundred thousand dollars ($500000) owed to Large Bank. The debt is secured by a floating charge over the assets of the company. It is a term of the charge that the floating charge will crystallise should an administrator be appointed. The company has defaulted in making its repayments to Large Bank and the directors are concerned that the company is unable to pay its debts as they become due and payable. The directors decide that it is best to enter into voluntary administration.

(i)Why the directors might want to appoint an administrator in these circumstances?

(ii)What options does the secured creditor (Large Bank) have once the administrator has been appointed?

(iii)If the company moved from voluntary administration into liquidation, would Large Bank be in a better position than the other unsecured creditors?

(iv)What difference, if any, would it make if Large Bank had not registered the floating charge?