Roy silver and four other directors run a pest extermination business in wellington called pests no more
Question:
Roy silver and four other directors run a pest extermination business in wellington called pests no more ltd (Pnm) in 2010 they bought the business from Australian owners. each director lent the company $100,000 as subordinated debt for a 20 year term. in march 2021 the company was successfully sued by a client for negligent application of poison. the payment of damages and the resulting negative publicity has cause the business to struggle financially
in January 2021 pnm borrowed from bsb bank to fund the court case and bsb tool a security interest over all pnm present and after acquired property as security for the loan. in January 2023, a creditor of pnm incurred costs of $30,000 applying for high court for orders appointing a liquidator of the company. on 15 April 2023 the court appointed a liquidator they began to investigate the business accounts and estimated that there would be significant shortfall in funds with which to pay creditors. employees for example were owed $50,000 in unpaid holiday pay. the liquidator found no wrongs on part of the directors but discovered that in June 2021 PNM sold a car to Roys caught rebel for $5,000 when its market value was $35,000. before seeking to make any recoveries the liquidator calculated that ordinary creditors are owed $70,000 and $400,000 is available for distribution
Calculate weather roy receive as a holder of subordinate debt
Explain weather the liquidator has grounds for recovering any money from rebel
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill