October /
November
2021
MRL3701
Insolvenc
y Law
100 Marks
24 Hours
Take Home Exam 07 October -08 October 2021
NB. Answers are for comparative purposes
1.1
Concursus creditorum ( coming together of creditors) is established by winding-up like sequestration, it
is aimed at ensuring that the company's property is collected and distributed among creditors in the
prescribed order of preference (Taylor and Steyn NNO v Koekemoer 1982 (1) SA 374 (T) 377. The
concurses creditorum is established by granting of a winding-up order, including a provisional order
(Excellent petroleum (Pty Ltd (in Liquidation) v Brant Oil (Pty) Ltd 2012 (5) SA 407 (GNP)
.
, The company however does not lose its corporation identity, nor does it lose title to its assets (unless so
ordered: section 361 (2). And before the winding-up commences, the following consequences ensue:
1. The powers of directors cease and the directors become functus officio. In a voluntary winding-up, the
liquidator, creditors, or members may sanction a continuance of director's powers in while or in part.
2. The company's property is deemed to be in the custody and under the co tool of the master until a
provisional liquidator has been appointed and has assumed office. A company thus retains the
Dominium of its property.
3. The company may continue with its business, except in so far as may be necessary for its beneficial
winding-up.
1.2
Voluntary surrender was designed for the benefit of creditors, and not for the roof of harassed debtors.
Voluntary surrender applications must comply with the provisions i section 6 (1) of the act, that is, the
court must be satisfied that it will be to the advantage of creditors if the debtor's estate is surrendered.
Under voluntary surrender courts regime applicants to make a fill and frank disclosure of their affairs
and without doing so, the court's can it be satisfied. The court also pointed out that the high level of
disclosure being required is due to the application being ordinary brought forward on an ex parte basis
and applications brought on this basis requires the utmost good faith.
With that said, it can be established that test relating to advantage to creditors in voluntary
sequestration proceedings is stricter than that of provisional sequestration of a debtor's estate under
compulsory proceedings by creditors.
Whereas, compulsory application only requires the court to be of the opinion that prima facie there is
reason to believe that it will be to the advantage of the creditors of the estate is sequestrated.
It is also more strictly framed than that for the final sequestration of a debtor's estate under compulsory
sequestration, which only requires the court to be satisfied that there is reason to believe that it will be
to the advantage of creditors if the estate e is sequestrated.
1.3
In terms of section 9(1): Compulsory sequestration, a creditor or creditors may apply for sequestration
with a liquidated claim. For more than R100.00.
The main act purposes served by an act of insolvency is that the creditor wishing to apply for
compulsory sequestration of the debtor's estate need not prove that the debtor is in fact insolvent.
Under the Acts of insolvency, a debtor's estate may in some cases be sequestrated even if he is
technically solvent. In terms of section 8 (c), a debtor commits an act of insolvency if he makes, or
attempts to make, a disposition of any of his property which has or would have the effect of prejudicing
his creditor or preferring one creditor above another.
November
2021
MRL3701
Insolvenc
y Law
100 Marks
24 Hours
Take Home Exam 07 October -08 October 2021
NB. Answers are for comparative purposes
1.1
Concursus creditorum ( coming together of creditors) is established by winding-up like sequestration, it
is aimed at ensuring that the company's property is collected and distributed among creditors in the
prescribed order of preference (Taylor and Steyn NNO v Koekemoer 1982 (1) SA 374 (T) 377. The
concurses creditorum is established by granting of a winding-up order, including a provisional order
(Excellent petroleum (Pty Ltd (in Liquidation) v Brant Oil (Pty) Ltd 2012 (5) SA 407 (GNP)
.
, The company however does not lose its corporation identity, nor does it lose title to its assets (unless so
ordered: section 361 (2). And before the winding-up commences, the following consequences ensue:
1. The powers of directors cease and the directors become functus officio. In a voluntary winding-up, the
liquidator, creditors, or members may sanction a continuance of director's powers in while or in part.
2. The company's property is deemed to be in the custody and under the co tool of the master until a
provisional liquidator has been appointed and has assumed office. A company thus retains the
Dominium of its property.
3. The company may continue with its business, except in so far as may be necessary for its beneficial
winding-up.
1.2
Voluntary surrender was designed for the benefit of creditors, and not for the roof of harassed debtors.
Voluntary surrender applications must comply with the provisions i section 6 (1) of the act, that is, the
court must be satisfied that it will be to the advantage of creditors if the debtor's estate is surrendered.
Under voluntary surrender courts regime applicants to make a fill and frank disclosure of their affairs
and without doing so, the court's can it be satisfied. The court also pointed out that the high level of
disclosure being required is due to the application being ordinary brought forward on an ex parte basis
and applications brought on this basis requires the utmost good faith.
With that said, it can be established that test relating to advantage to creditors in voluntary
sequestration proceedings is stricter than that of provisional sequestration of a debtor's estate under
compulsory proceedings by creditors.
Whereas, compulsory application only requires the court to be of the opinion that prima facie there is
reason to believe that it will be to the advantage of the creditors of the estate is sequestrated.
It is also more strictly framed than that for the final sequestration of a debtor's estate under compulsory
sequestration, which only requires the court to be satisfied that there is reason to believe that it will be
to the advantage of creditors if the estate e is sequestrated.
1.3
In terms of section 9(1): Compulsory sequestration, a creditor or creditors may apply for sequestration
with a liquidated claim. For more than R100.00.
The main act purposes served by an act of insolvency is that the creditor wishing to apply for
compulsory sequestration of the debtor's estate need not prove that the debtor is in fact insolvent.
Under the Acts of insolvency, a debtor's estate may in some cases be sequestrated even if he is
technically solvent. In terms of section 8 (c), a debtor commits an act of insolvency if he makes, or
attempts to make, a disposition of any of his property which has or would have the effect of prejudicing
his creditor or preferring one creditor above another.
