Question

Assume that Mr Shift’s family company subsequently goes into liquidation. In her report to ASIC, the liquidator states that the secured creditors have been repaid in full, but the unsecured creditors will not receive more than 20 cents in the dollar. The liquidator does not find any evidence of wrongdoing on the part of Mr Shift or any of his fellow directors.

What (if any) ramifications does this have for Mr. Shift assuming that ASIC’s records show that Mr. Shift has, over the last nine months, had a similar track record with two other small proprietary companies?

Answer 1

Liquidators report says that the secured creditors can be paid in full but there is no money with the company to pay to the unsecured creditors which are not prioritized in the ranking of payments.

Mr Shifty being the director of the company and on observation of his past track record of similar nature in other two proprietary companies, the matter can be investigated by Australian Securities and Exchange Commission for the involvement of any fraudulent act because of which the company went into liquidation. This issue can be investigated by Australian Securities and Exchange Commission even if the liquidator has not found any wrong doing.