Task Aim (Insolvency)
In the task you will need to explain the priority of various charges, explain the options available to secured creditors as a result of these charges and use the structured approach to decide whether an earlier transaction of the company can be set aside.
Your client, National Bank plc, has just sent you the attached email, giving details of their concerns about a major borrower, Supercars Ltd (“Supercars”), which is in serious financial difficulties. You are asked to advise firstly on the various types of security given by Supercars over its assets and the options available to the bank and the other secured creditors and, secondly, on whether any liquidator would be able to investigate Supercars’ past transactions.
Your task is to draft an email in reply to the client. It should be of 1000 words and must be clear, logical and concise. Your email should contain the following headings:
1. Validity and priority of charges*
2. Options available to secured creditors
3. Investigation of past transactions of the company:
a) The relevant law and its application to the fixed charge of 20th July 2017
b) What can the liquidator do?
c) Will this make any difference to National Bank?