Secured creditors - winding up, Business Law and Ethics

SECURED CREDITORS:

A secured creditor may:

(a) realize his security and prove as an unsecured creditor for the balance (if any) of his debt;

(b)value the security and prove for any balance. In this case the liquidator may either redeem the security at the creditor's value or require it to be sold;

(c)rely on his security and not prove at all; the liquidator may then redeem by payment in full;

(d)surrender his security and prove for the whole debt.

A secured creditor who proves his debt must disclose his security and prove only for the balance as an unsecured creditor.

The liquidator may find that the security given by a floating charge over the undertaking and assets of the company has been enforced (before liquidation began) by the appointment of a receiver and manager who is in charge of the entire business and property of the company. The liquidator should consider whether the charge has become invalid by reason of the commencement of liquidation (paragraph 10 below). If however it is valid the liquidator must wait to see whether there will be any surplus from the company's assets which the receiver will pay over to him when the secured creditors who appointed the receiver have been paid in full. The sequence of events may be reversed i.e. the liquidator causes a floating charge to crystallize and a receiver is appointed after the liquidator has taken control. In that case the liquidator must hand over the business to the receiver since he represents creditors who have a prior claim.

Posted Date: 1/15/2013 5:22:03 AM | Location : United States







Related Discussions:- Secured creditors - winding up, Assignment Help, Ask Question on Secured creditors - winding up, Get Answer, Expert's Help, Secured creditors - winding up Discussions

Write discussion on Secured creditors - winding up
Your posts are moderated
Related Questions
Mode of Alteration:  The alteration of capital may be made by - 1) Increasing the company's share capital by new shares of such amount as the resolution prescribes; or 2

Theories of self-enforcing or implicit contracts These theories relate to the problem of limits to which legal compulsion can be employed (due to information or transaction cos

Types and Classification of Law: Rules of law may be classified as like;: For Written For National and International For Public and Private For Substantive

Requisites in Form - Negotiable Instruments  To satisfy to the statutory definition the document alleged such to be a bill of exchange must be: like  (a) Unconditional. Example

Resolution for the variation - Statutory provisions: Where any application is made pursuant to this provision, the variation shall not have effect unless and until it is confi

Describe about the Policy Agenda Setting Agenda setting under direct democracy. Agenda setting concerns to the rules on the grounds of which policy proposals come up for a vote

OPPRESSION OF  MINORITIES:                    7.3.1 Section 211 of the Act provides that any member of a company who complains that the affairs of the company are being conduc

Hirer Requires Information from the Owner Conversely the hirer requires some information from the owner whether he should send him a written request so and then like pay to hi

Name to end with the word "Limited":                             S.5(1)(a) provides that the word "limited" must be the last word of the name of a company which is to be limit

Reconstruction Under S.280: The essential features of this type of reconstruction have been described at 8.2.1(b).  It is subject to several disadvantages and is little used.