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Advise the liquidator of Train Limited as to the order of payment of the company's creditors and whether the assets available to the ordinary creditors, can be increased.
Member rating: No Rating | Words: | Submitted: Mon Jun 19 2006
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Company Law Problem Question 1 Train Limited has been in financial difficulties for the past twelve months. Paul and James, the two directors of Train Limited, have been aware of the difficulties for some time, but have been trying to trade through them. However, in the last two months, things have got significantly worse. Last month, James's brother Adrian was persuaded to lend the company £5,000. Two weeks ago, the loan was repaid from money received by the company from a completed contract. Three weeks ago, James and Paul each bought their company car from the company. Each car was worth around £12,000. James and Paul each paid £2,000 respectively for their car. Six months ago, Big Bank plc lent the company £4,000. The loan was originally unsecured, but three months ago, the Bank insisted on being given a floating charge over all the company's assets, which the company granted. The charge was duly registered. Train Limited...
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