ACCA · Question 59 · Syllabus G: Insolvency law
Scenario: Global Logistics Ltd is facing financial difficulties. It has a fixed charge over its warehouse in favour of Alpha Bank, and a floating charge over its fleet of trucks in favour of Beta Bank. The company owes £50,000 to its employees for unpaid wages. The directors are considering putting the company into administration to rescue it as a going concern.
If the company goes into liquidation, what is the correct order of priority for paying out the assets?
Answer options:
Fixed charge holders, preferential creditors (employees), floating charge holders, unsecured creditors.
Preferential creditors, fixed charge holders, floating charge holders, unsecured creditors.
Floating charge holders, fixed charge holders, preferential creditors, unsecured creditors.
Unsecured creditors, preferential creditors, floating charge holders, fixed charge holders.
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