Winding-up application is based upon without prejudice

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Question

Best Bank Ltd institutes an application for winding-up of Getaway Trucking (Pty) Ltd ('Getaway'). The winding-up application is based upon a 'without prejudice' letter of reply from Getaway to a letter of demand by Best Bank Ltd. In terms of the letter of demand, Best Bank Ltd is seeking payment of arrears under the loan agreement. The letter of reply from Getaway specifically states that 'the company will tender payment only if there were surplus funds available for repayment of arrears.' Getaway denies that it is commercially insolvent. Getaway further says that in terms of the loan agreement entered with Best Bank Ltd, part of the debt giving rise to the winding-up application was extinguished by prescription. Lastly, Getaway argues that the remainder of the debt was not yet due and payable as it had been subordinated to the debts of other creditors of the company by agreement between the parties. Therefore, according to Getaway, it was not indebted to Best Bank Ltd. You are appointed the legal adviser of Best Bank Ltd, and must provide advice on the legal position of Best Bank Ltd regarding the following matters: a. The laws specifically applicable should Getaway be wound up and.

Reference no: EM133840387

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