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FE1 Exam Thread (Read 1st post!) NOTE: YOU MAY SWAP EXAM GRIDS
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COMPANY
Could anyone help me understand priority of debts in liquidation I've confused myself no end.
So section 617(2) says that costs and expenses incurred in winding up including liquidators costs are to be paid in priority to all other claims, however in my manual and in a sample answer the priorities are listed as follows:
• Retention of title contracts
• Property held on trust returned
• Property subject to equities
• Third party insurance
• Set off mutual debts between creditor and company
• Costs of creditors proceedings
• Secured creditors (fixed charge holders)
• Judgment creditors
• Liquidators costs
• Preferential creditors: Revenue Commissioners get 1 years assessed tax, Company employees are paid and Rating authority is paid
• Floating charge holders are paid
• Unsecured creditors are paid, if the assets are insufficient they are paid pari passu
• Members and contributories are paid
So why are liquidators costs way down this list if section 617 says they should be paid first?
Any insight appreciated, finding company law such a struggle
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Is anyone else feeling completely burnt out? I am incredibly tired but whenever I'm not studying I get study guilt I'm lucky that i had loads of time off work to study so I'm mostly just on revision now for the last while and finished covering new topics(except for constitutional which is never ending...) but I feel like I've been studying since the womb at this stage
I'm the same, exhausted!
I'm really struggling with Tort! I haven't had much time off so i'm only half way through revising my notes. I'm a good crammer but I feel like im drowning in this one! Tryna stay positive0 -
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COMPANY
Could anyone help me understand priority of debts in liquidation I've confused myself no end.
So section 617(2) says that costs and expenses incurred in winding up including liquidators costs are to be paid in priority to all other claims, however in my manual and in a sample answer the priorities are listed as follows:
• Retention of title contracts
• Property held on trust returned
• Property subject to equities
• Third party insurance
• Set off mutual debts between creditor and company
• Costs of creditors proceedings
• Secured creditors (fixed charge holders)
• Judgment creditors
• Liquidators costs
• Preferential creditors: Revenue Commissioners get 1 years assessed tax, Company employees are paid and Rating authority is paid
• Floating charge holders are paid
• Unsecured creditors are paid, if the assets are insufficient they are paid pari passu
• Members and contributories are paid
So why are liquidators costs way down this list if section 617 says they should be paid first?
Any insight appreciated, finding company law such a struggle
From what I can remember, if the liquidator realises assets in respect of a fixed charge holder, then his fees will be retained by agreement. Once the assets are distributed to the fixed charge holders, super-preferential creditors, then the priority is- liquidation costs and expenses
- preferential creditors
- floating charge holders
- unsecured creditors
- members/contributories
So somewhat, the liquidator gets paid first
I’m open to others correcting me though
it’s been a while since I’ve done company and also struggled with it 0 -
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This discussion has been closed.
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