Vandalay Chocolate Sprouts Pty Ltd, operated its business from a factory it rented from Industrial Park Ltd. Since the significant economic down turn as a result of the worldwide pandemic, Vandalay Chocolate Sprouts Pty Ltd had been experiencing extreme financial difficulties and its financial records were a hopeless mess. It was continually late in paying debts owed to its suppliers and paying employees’ wages. With Christmas coming up, its directors were uncertain whether the company would be able to pay its employees their holiday entitlements. The company’s main creditors were:  Its bank, which is owed $1 million. This loan was unsecured but was guaranteed by the directors of Vandalay Chocolate Sprouts Pty Ltd; 

 Industrial Park Ltd, which was owed $75,000 arrears of rent;  

 Its employees, who were owed $350,000 unpaid wages. About three months ago the company was paid $100,000 from one of its customers. This was deposited into the company’s bank account, reducing the amount due to the bank.

Your Task 

Advise each of the creditors referred to above how they would be affected if Vandalay Chocolate Sprouts Pty Ltd were placed in voluntary administration. Give reasons for your answer referring to the Corporations Act 2001 (Cth) and/or cases as relevant to support your argument

Answer rating: 100% (QA)

Voluntry dministrtion is process designed to give compny brething spce from its norml opertions When compny is experiencing finncil difficulty nd cnno... View the full answer