Roderick, Ofon and Ximing are directors of a large publicly listed building company called Melbourne Commercial Excavations Ltd (MCE). The company has traded successfully for many years and has a long list of clients including residential property developers, local government bodies, and prestigious independent shools. MCE also owns most of machinery it uses on site e.g. dump trucks, excavators, graders, bulldozers.

Despite its good track record and blue chip clientele, MCE has run into trouble lately. Roderick believes that MCEs current situation is simply a by-product of short-term challenges arising from COVID e.g. import restrictions have increased the cost of suppliers, and boarder restrictions have caused labour shortages. However, Ofon and Ximing are more nervous about the companys solvency, especially since MCE was hit with several statutory demands last week from supplies and subcontractors.

Advise Roderick, Ofon and Ximing on the risk associated with continuing to trade in the current circumstances?

What options are available to MCE and its trade creditors in terms of external administration in the short to medium term?Roderick, Ofon and Ximing are directors of a large publicly listed building company called Melbourne Commercial Excavations Ltd (MCE). The company has traded successfully for many years and has a long list of clients including residential property developers, local government bodies, and prestigious independent shools. MCE also owns most of machinery it uses on site e.g. dump trucks, excavators, graders, bulldozers.

Despite its good track record and blue chip clientele, MCE has run into trouble lately. Roderick believes that MCEs current situation is simply a by-product of short-term challenges arising from COVID e.g. import restrictions have increased the cost of suppliers, and boarder restrictions have caused labour shortages. However, Ofon and Ximing are more nervous about the companys solvency, especially since MCE was hit with several statutory demands last week from supplies and subcontractors.

Advise Roderick, Ofon and Ximing on the risk associated with continuing to trade in the current circumstances?

What options are available to MCE and its trade creditors in terms of external administration in the short to medium term?