Besides there are pertinent legal regulations that must be satisfied before a company liquidation could be executed. As Peter and Bisimba (2007) argued, payment of debts after realization of the assets of an insolvent company is often controversial area of the insolvency law (2007: 187). According to Peter and Bicimba, distribution of sales is effected on the following order; Costs of selling the assets including costs of maintaining the assets such as insurance policies to protect the assets, executing the repair to make the property saleable. The liquidator’s and the receiver’s expenses Costs of trustees of the debenture.
Costs of all rents, taxes, rates and outgoings whatsoever affecting the property Statutory payments in a winding up Payment 1st ranking debenture/mortgages with interest Payment of debts to subsequent charges’ debts, with interests Payment of any balance amounts to liquidator Given all these considerations it is certainly necessary for the liquidator to meet with all the creditors of the two companies in order to inform them of the potential conflict if the issue is not resolved prior or incase of liquidation. They should also see to it that they complied with the existing law under IA 1986 regarding their rights to receive their share.
The liquidator should fully discuss the costs of liquidation in view what has been discussed above, otherwise it would be a very complicated issue. Second, he should call a meeting with the Brandy plc executives to discuss whether they see liquidation as the last resort for these two companies. Under Insolvent Act 1986 s 213, it states that the parent company may be held liable as party to the fraudulent trading, or as shadow director, liable for wrongful trading under IA 1986, s 214 (Sealy and samsung hierarchy structure 2008: 70).
The liquidator should emphasize to the management of Brandy plc their liability especially in view of the two provision of IA 1986 in order to give them opportunity to redeem the company and to inform them of their responsibility and accountability under the existing law. Brandy plc should realize that they have violated the law by acting as shadow director of the company and of fraudulent trading which allowed the two subsidiary companies to go bankrupts.
Besides there are pertinent legal regulations that must be satisfied before a company liquidation could be executed. As Peter and Bisimba (2007) argued, payment of debts after realization of the assets of an insolvent company is often controversial area of the insolvency law (2007: 187). According to Peter and Bicimba, distribution of sales is effected on the following order; Costs of selling the assets including costs of maintaining the assets such as insurance policies to protect the assets, executing the repair to make the property saleable. The liquidator’s and the receiver’s expenses Costs of trustees of the debenture.
Costs of all rents, taxes, rates and outgoings whatsoever affecting the property Statutory payments in a winding up Payment 1st ranking debenture/mortgages with interest Payment of debts to subsequent charges’ debts, with interests Payment of any balance amounts to liquidator Given all these considerations it is certainly necessary for the liquidator to meet with all the creditors of the two companies in order to inform them of the potential conflict if the issue is not resolved prior or incase of liquidation. They should also see to it that they complied with the existing law under IA 1986 regarding their rights to receive their share.
The liquidator should fully discuss the costs of liquidation in view what has been discussed above, otherwise it would be a very complicated issue. Second, he should call a meeting with the Brandy plc executives to discuss whether they see liquidation as the last resort for these two companies. Under Insolvent Act 1986 s 213, it states that the parent company may be held liable as party to the fraudulent trading, or as shadow director, liable for wrongful trading under IA 1986, s 214 (Sealy and samsung hierarchy structure 2008: 70).
The liquidator should emphasize to the management of Brandy plc their liability especially in view of the two provision of IA 1986 in order to give them opportunity to redeem the company and to inform them of their responsibility and accountability under the existing law. Brandy plc should realize that they have violated the law by acting as shadow director of the company and of fraudulent trading which allowed the two subsidiary companies to go bankrupts.
