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Subject: Business Law , Accounting

Question 5 (25 marks) (a)Winter Ltd is in the process of winding up and Don is appointed the liquidator. He has established the following: (1) The company acquired a property in Kowloon for $30 million and it is the subject of a charge to Kowloon Bank for $20 million. The current market price of the property is $16 million (11) The company has other unencumbered non-current assets of $4 million (111) The company has a bank balance of $1.04 million at Water Bank (iv) The company has not paid its tax bill of $200,000 (v) The company still owes its suppliers $4 million (vi) Liquidator's fees of $200,000 is owed to Don (vii) The company owes its non-executive directors a total of $2 million directors' fees 3 (viii) The company owes each of its 40 employees wages of $66,000 and sever severance payment of $100,000 Required: Advise Don on how the assets of the company should be distributed. (please ignore the operation of the Protection of Wages Insolvency Ordinance) (16 marks)