You have just graduated as an accountant and obtained a position as 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 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. What are the consequences for the directors of the company going into

administration?

2. 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?

3. What is the purpose of a deed of company arrangement?

REQUIRED:

Please prepare a report for the directors answering their questions referring to

relevant legislation and case law where appropriate