COML204 Commercial Law : Solution Essays

You are an intern for Everything Supplies Ltd (ESL), a business that sells materials to companies in the building industry. When Harry Green, the managing director of ESL, hears that you are a commerce student he corners you at the company’s Friday afternoon social event.

“I just don’t get it,” Harrys says, “When our customer companies become insolvent, ESL has sometimes been able to reclaim the goods we have sold. Other times, we’ve only received 20 cents for every dollar owed. In one case, we were paid in full, but the court made us pay the money back to the liquidator. These outcomes are a mystery to me and my managers. Please draft a memo to staff explaining how this corporate insolvency thing works.”

 

Required

Write a memo to ESL staff explaining the corporate insolvency laws that confuse Harry in the three situations he identifies. You should use plain language but should also include pinpoint statutory citations and references to case law, where relevant.

 

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