Skip to content

CS Professional · Corporate Restructuring, Valuation and Insolvency · Liquidation on or after Failing of Resolution Plan

In the liquidation of Kaveri Steels Ltd, the following claims are outstanding against available proceeds: (A) unpaid wages of an officer (not a workman) for the last 12 months before liquidation commencement; (B) financial debts owed to unsecured creditors; (C) workmen's dues for the 24 months before liquidation commencement; (D) liquidation costs. Which is the correct order of payment?

Liquidation costs are paid first, then workmen's dues for 24 months, then wages and dues of other employees for 12 months, then unsecured financial debts. Hence the order is costs, workmen, other employees, unsecured financial creditors.

  1. AD, C, A, BCorrect
  2. BD, A, C, B
  3. CC, D, A, B
  4. DD, C, B, A

Explanation

Costs rank first. Workmen's dues for 24 months rank next. Wages and unpaid dues of employees other than workmen for 12 months come after, and financial debts owed to unsecured creditors follow. So the order is D, C, A, B. Placing A before C wrongly ranks officers above workmen.

Did you get it right without looking?

One question tells you little. A timed set on Liquidation on or after Failing of Resolution Plan shows your real accuracy, how long you take and where you lose marks.

Practise Liquidation on or after Failing of Resolution PlanFree diagnostic mock

More Liquidation on or after Failing of Resolution Plan questions