Tutorial Question AUSTRALIA:

You have just graduated as an accountant and obtained a position as a financial accountant with Wind Up Accountants. Your first job is in the insolvency division of the firm. Recently the firm has been appointed as administrator by the directors of a fresh food company.

You have been asked by the partner of the accounting firm to prepare a paper to be handed out to the directors of the company.

In the paper you will need to advise the directors of the following matters:

1. There are two secured creditors, one being the bank which has a non-circulating charge, and one being the supplier of fresh fruit and vegetables which has a circulating charge. What are their rights and can they exercise their security and recover their funds? Please reference the Corporations Act 2001, case law, or other relevent law if applicable.