Suggested areas to cover

Question 1

INSOLVENCY- In a court ordered vote for a restructuring of the company, what percent in value of the creditors at the meeting need to vote in favour?

Answer 1

75%

Question 2

INSOLVENCY- when 75% approval is not met due to dissenting votes (in a court ordered vote on a restructuring proposal) can it still be implemented?

Answer 2

Yes if the court is of the view that the group representing the dissenting would not be worse off than in the event of the relevant alternative

Question 3

INSOLVENCY- how to minimise the risk of personal liability?

Answer 3

• take every step to minimise potential losses to company’s creditors
• based on their knowledge, skills and experience
• and that which may be reasonably expected of persons carrying out the same functions

Question 4

INSOLVENCY- Can transactions at an undervalue be set aside if they were entered into in good faith?

Answer 4

No- as long as they were made in the belief that they would benefit the company

Question 5

INSOLVENCY- order in which creditors are paid in the liquidation process

Answer 5

1. liquidators fees
2. secured creditors with fixed charges
3. preferential creditors (unpaid wages, tax, holiday/pension pay)
4. secured creditors with floating charges
5. unsecured creditors
6. shareholders

Question 6

INSOLVENCY- What is the quickest and cheapest way to delay creditors being able to enforce claims against a company

Answer 6

• apply to court for a moratorium
• should normally file docs at court but not if there isn’t a lot of time

Question 7

INSOLVENCY - Creditors Voluntary Liquidation vs Members Voluntary Liquidation

Answer 7

• creditors is used when a company is insolvent and unable to pay debts
• members is used when you want to wind up a company when it is believed it is solvent and able to pay creditors in full

Question 8

INSOLVENCY- what type of resolution do you need to propose a creditors voluntary liquidation

Answer 8

Special resolution