Reference no: EM132680520

Bat Fencing Contractors Pty Ltd operates a Tasmanian wide fencing business. Its four directors are Dusky Bat, Javan Bat, Hennick Rum and Bligh Rum. The shareholders are Wattle Bat, Javan Bat, Dusky Bat, Pipistrelle Bat, Hennick Rum and Bligh Rum. Each shareholder owns one share. Javan and Dusky are directors and shareholders in another two companies and together, they have substantial personal assets.
Recently Tasmania has seen a serious downturn in business. This means that bot Bat Fencing Contractors Pty Ltd and another business operated by Javan and Dusky - Human Animal Removal Solutions (HURS) suffer a decline in business and become financially unviable.

• Zade Pty Ltd is the supplier of fencing supplies to Bat Fencing Contractors. Zade Pty Ltd has ignored past failures by Bat Fencing Contractors Pty Ltd to pay outstanding debts but is now owed $50,600. This amount has been outstanding for three months.

• Javan and the other directors decide to appoint an administrator, Monique to Bat Fencing Contractors Pty Ltd. At the first meeting of creditors Zade Pty Ltd objects to Monique's appointment. The meeting decides to replace Monique with a new administrator, Sassy.

• Sassy, while in charge, consults with the state government and is told it will agree to compensate the company for some loss of business. However, the state government has concerns brokering such a deal as both Hennick and Bligh and Dusky have poor track records as company directors. They each have been disqualified from participating in the management of a corporation in the past. Sassy does not mention any of this to creditors at their next meeting when the vote is taken to have the company enter into a deed of company arrangement.

• Green Ribbon Bank Ltd (Green Ribbon Bank) holds a debenture charge over both Bat Fencing Contractors Pty Ltd and Humane Animal Removal Solutions Pty Ltd (HURS), which contains a clause allowing for the appointment of a receiver should the company default on interest payments.

• HURS defaults in July and Tania, a receiver, is appointed to HURS. She sells a Ford Transit van owned by HURS and receives only $5000. The value of this van would conservatively be $40,000. Further enquiry suggests that she sold it to her retired father without advertising it or providing an opportunity for members of the public to purchase it.

Required: Please answer the following questions:

Question 1: What options are available to Zade Pty Ltd or any other creditor who has substantial debts and is waiting to be paid by Bat Fencing Contractors Pty Ltd?

Question 2: How could the directors have appointed Monique and then finished up with Sassy running their company?

Question 3: Has Tania breached any provisions of the Corporations Act 2001 (Cth)?

Question 4: Can Green Ribbon Bank play any role in the voluntary administration?

Question 5: If a liquidator was appointed to HURS and found that Javan had repaid a loan on behalf of the company to his family just three weeks before the appointment, could this berecovered?