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
International Competition Law -  Select a specific industry or corporation and analyse the factors that determine a competitive or anticompetitive outcome; - Factors such a

In light of some latest accounts coming into the company and working to promote its latest services, IDSS has also make a few trademarks to ensure and protects its innovative techn

Characteristics of Unincorporated Associations However these are associations of persons that who associate to promote a common and lawful purpose.  Thus now they have no lega

This project requires you to choose an organisation of your own choice and discuss on the following with respect to your chosen organisation: External Environment Mega

Common law rule - meetings and resolutions: The common law rule applies irrespective of whether the failure to give notice of the meeting was deliberate or unintentional.  How

State Article 8 of Universal Declaration of Human Rights. Article 8 - 'Everyone has a  right to  an  effective  remedy by  the  competent national tribunal for acts violating t

Minimum subscription - Commencement of business: If the minimum subscription was not raised the company can only commence business or exercise borrowing powers if:- a)

Can general jurisdiction be obtained? Explain why/why not.  The Company has paid for three (3) trips for Patty to attend Prop 65 conferences in CA.  You discover that she did no

LEGAL LIABILITY FOR LABORATORY ACCIDENTS IN EDUCATIONAL INSTITUTIONS : As mentioned in some of the earlier sections, law is not directly available to decide legal liability for la

Fraudulent concealment of a book: Hence it is nothing to him where dividends are properly or improperly declared, and provided he discharges his own duty to the shareholders.