Raffa runs a soil-testing business. He decides to form a company to take over the business. He is the sole shareholder and sole director. Raffa sells his business to the company at an inflated price and lends the company $90,000 to help meet the cost of purchase. As security for the loan, Raffa arranges a mortgage over a vacant block of land, which he transferred to the company as part of the business sale.

In the first year of operation, the business makes a small profit (after paying both Raffa and his wife's wages), but by the end of 2012 it is clear that the building industry is going through a major slump. Raffa becomes desperate and works even harder. While working late into the night, Raffa has a nervous breakdown and needs bed rest for three months. His efforts to keep the business afloat are in vain and the company is forced into liquidation. On realisation of the assets, it is found that the company has approximately $200,000 to go towards meeting creditors' claims of $1,210,000:

(a)If Raffa is the only secured creditor, will he get back his $90,000?

(b)How much will the creditors get?

(b) Can Raffa claim workers' compensation, assuming that he is otherwise entitled to it?