Mrs. Katie Jones' ("Katie") estate was sequestrated on 1 February 2023. On 1 March 2023 the first meeting of creditors was held and on 1 April 2023 the second meeting of creditors was held. Katie has the following creditors: Sam Smith, to whom she owes R20 000.00 (Twenty thousand rand) for a loan, and Orange Bank Limited, for a credit card debt totalling R80 000.00 (Eighty thousand rand), R60 000.00 (Sixty thousand rand) owing to Best Furniture (Pty) Limited for furniture she purchased under an instalment sale agreement, and R 10 000 (Ten thousand rand) to Super Bank Limited for a personal loan. Sam Smith was not aware of the first and second creditors meetings and did not attend.

At the first meeting of creditors, Orange Bank Limited voted for Mark Elliot to be the trustee of the estate. On the other hand, Best Furniture (Pty) Limited and Super Bank Limited voted for Tom Burns to be the trustee of the estate.

The trustee also wishes to obtain instructions from the creditors in respect of the uncompleted contract of a lease agreement with Best Seaside Rentals (Pty) Limited. Prior to sequestration, Katie had entered into a lease agreement with Best Seaside Rentals (Pty) Limited for the rental of a holiday flat at Sea Point, Cape Town for a period of 2 years with a monthly rental payable of R50 000.00 (Fifty thousand rand). Prior to sequestration, Katie owed an amount of R200 000.00 in respect of rental payable. At the date of sequestration there is a further 12 months remaining on the lease agreement. Katie stores her BMW Z4 in the parking lot at her holiday flat.

 

Q.2.1

Explain the election process that will take place at the first meeting of creditors and who will be appointed as the trustee of Katie's estate.

(10)

Q.2.2

With reference to the set of facts, discuss the purpose of the first and second meeting of creditors.

(20)

Q.2.3

The first and second meeting of creditors are convened by different individuals. With reference to the set of facts, advise who will convene the two meetings of creditors.

(5)

Q.2.4

With reference to Ex parte the Master of the High Court South Africa (North Gauteng) 2011 (5) SA 311 (GNP) set out what role the Master plays in insolvency proceedings and provide three (3) examples of the Master's functions and/or duties.

(5)

Q.2.5

The Trustee has elected to not continue with the lease agreement. Explain what types of claim/s and the extent of those claims, if any, that Best Seaside Rentals (Pty) Limited have against the insolvent estate.

Answer rating: 100% (QA)

Q21 Explanation of the election process at the first meeting of creditors and appointment of the trustee At the first meeting of creditors the creditors present will have the opportunity to vote for t... View the full answer