The proceeds of realisation of assets under a floating charge will first be used to pay certain priority claims in accordance with section 328 of the Companies Act (Cap.50) before satisfying the claim of the lender secured by the floating charge.
a) Proceedings against the company An application may be made to the Court to stay or restrain pending proceedings against the company at any time after the presentation of a winding up application and before a winding up order has been made.
No action or proceeding shall be proceeded with or commenced against the company except with the Court's leave after a winding up order has been made.
c) Execution proceedings After a winding up application has been presented, no creditor is allowed to take out or continue attachment or execution proceedings against the company.
A creditor must complete execution before the winding up application has been presented. For example, goods under a writ of seizure and sale must be seized and sold; garnishee proceedings are completed on receipt of the debt.
Creditors' voluntary winding up If the company is not able to meet its liabilities, the company can convene a meeting with its creditors to consider its proposal for a voluntary winding up of the company.
If a resolution is passed in favour of the winding up, the company will appoint a liquidator, subject to any preference the creditors may have as to the choice of liquidator.
The common grounds for a company to be wound up by the Court include: The company is deemed unable to pay its debts under section 254(2)(a) of the Companies Act (Cap.
50) if a company's creditor, who is owed more than S,000, has served a demand for the sum owing at the registered office of the company, and the company has not paid this sum for three weeks thereafter.
e) Secured creditors The rights of the secured creditor to deal or realise security over company assets are not affected by the winding up order.