Ben is a director of Float-a-way Pty Ltd, a company which specialises in holidays on yachts to exotic Pacific islands. Unfortunately, due to a tidal wave many facilities have been destroyed and the Pacific tourist industry has suffered a significant downturn.

Two months ago, Float-a-way Pty Ltd sold one of its luxury yachts to Mary, a director of Float- a-way Pty Ltd for $2,000.

Float-a-way Pty Ltd owed $10,000 to South Pacific Supplies Ltd for provisions supplied to its yachts. This amount was outstanding for many months. Percy, a director of South Pacific Supplies Ltd has been a friend of Ben for some years and Ben had kept Percy informed about Float-a-way Pty Ltd's financial position. One month ago, Ben arranged for the total amount owing to South Pacific Supplies Ltd to be paid by Float-a-way Pty Ltd.

Office Stuff Pty Ltd has leased office equipment to Float-a-way Pty Ltd and there is a lease payment of $2,000 due each month. The lease has not been paid for 3 months and Office Stuff Pty Ltd has lodged a statutory demand on Float-a-way Pty Ltd. Ben throws the demand away and ignores it. One month after the statutory demand was presented to Float-a-way Pty Ltd, Office Stuff Pty Ltd sought the winding up of Float-a-way Pty Ltd.

REQUIRED:

(a)  Advise whether the Court would be likely to order the winding up of Float-a-way Pty Ltd, following the application of Office Stuff Pty Ltd.

(b)  If the assets of Float-a-way Pty Ltd are insufficient to meet its debts, are any of the transactions described above voidable under the provisions of the Corporations Act?

(c)  Describe the priorities under which the liquidator should distribute available funds owing to creditors.

Answer rating: 100% (QA)

a The Court would likely order the winding up of Floataway Pty Ltd following the application of Office Stuff Pty Ltd Floataway Pty Ltd has failed to p... View the full answer