Insolvency + SH

Question 1

What are the three cascading objectives of administration?

Answer 1

1) To rescue of the company as a going concern, then
2) If not reasonably practicable or would not achieve a better result for the creditors as a whole, then to achieve a better result for the company’s creditors as a whole than would be likely if the company were wound up without first being in administration.
c) Then the objective is realising property in order to make a distribution to one or more secured or preferential creditors

Question 2

Relevant date for QFCHs?

Answer 2

15 September 2003

Question 3

What is a QFCH?

Answer 3

A floating charge over all or substantially all of the company’s assets, and the security document, either:

(1) States that para 14 of Schedule B1 1986 IA applies or
2) Purports to grant holder the ability to appoint an Administrator

Question 4

Relevant time period for transaction at an undervalue for connected and unconnected persons? s.238 IA

Answer 4

2 years regardless

Question 5

Relevant time period for a preference? s239 IA

Answer 5

6 months unconnected person and must be at onset of insolvency

2 years for connected person and insolvency is presumed

Question 6

Relevant times for challenging floating charge? s245 IA

Answer 6

Unconnected person - 12 months

Connected person - 2 years

Question 7

Deadline for registering security?

Answer 7

21 days from the day after creation, s859A

Question 8

Consequence of failing to register security in time and reference?

Answer 8

The charge is void, s859H

Question 9

Do directors have to table resolution to remove a director under s168?

Answer 9

No, not obliged - as established in Pedley v Inland Waterways

Question 10

The name of the clause that grants a director-shareholder with weighted voting rights?

Answer 10

Bushell v Faith

Question 11

General rule for restrictive covenants?

Answer 11

Prima facie void unless they:

1) protect a business interest, and
2) only go as far as necessary to protect that interest

Question 12

What employee claim is contractual?

Answer 12

Wrongful Dismissal

Question 13

What employee claim is statutory?

Answer 13

Unfair dismissal

Question 14

3 remedies for statutory dismissal?

Answer 14

Reinstatement
Renegagement
Compensation (basic and compensatory award)

Question 15

5 requirements of a settlement agreement and the statutory reference

Answer 15

s203 ERA 1996:

1) In writing
2) Specific claim
3) Employee has sought independent legal advice
4) Advisor has prof. insurance
5) A statement that the conditions regulating the statement have been met.

Question 16

What alternative action could a director- shareholder take if removed as a director?

Answer 16

s994 - Unfair prejudice claim

Question 17

Unfair prejudice case?

Answer 17

Re Company No. 00477 - Legitimate expectation to be involved in the management of the company.

Question 18

Payments for loss of office - statutory reference

Answer 18

217(1) - OR of members

Question 19

Principle of case when overdrafts and floating charges are concerned

Answer 19

Clayton’s case - overdraft operated chronologically, earliest indebtedness is repaid first.