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MRL3701 Assignment 2 (COMPLETE ANSWERS) Semester 2 2024 - DUE 13 September 2024 Course Insolvency Law (MRL3701) Institution University Of South Africa (Unisa) Book Hockly's Insolvency Law$2.57
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MRL3701 Assignment 2 (COMPLETE ANSWERS) Semester 2 2024 - DUE 13 September 2024 Course Insolvency Law (MRL3701) Institution University Of South Africa (Unisa) Book Hockly's Insolvency Law
MRL3701 Assignment 2 (COMPLETE ANSWERS) Semester 2 2024 - DUE 13 September 2024
Course
Insolvency Law (MRL3701)
Institution
University Of South Africa (Unisa)
Book
Hockly's Insolvency Law
, QUESTION: Simphiwe owes a total of R3 million to various
creditors. His creditors include Tebogo to whom he owes R400 000.
He also owes R1,3 million to BFN Bank. Last year Simphiwe
invested in a get-rich-quick scheme and as a result he lost a lot of
money. This left him in a dire financial situation. By 31 October
2023 his liabilities exceeded his assets by R800 000. Over the past
few months Simphiwe has failed to pay some of his debts. In
particular he failed to pay the R400 000 he owes to Tebogo. This
debt was due and payable on 1 February 2024. Disappointed at not
having been paid back the R400 000 owed to her, Tebogo undertook
an investigation into Simphiwe’s financial situation. The
investigation turned up unassailable proof that Simphiwe had owed
R100 000 to his father-in-law, and that Simphiwe repaid R80 000 to
his father-in-law on 3 February 2024. Mindful that he was
technically insolvent and that one of his creditors could apply for the
sequestration of his estate at any time, Simphiwe had wanted to
ensure that whatever happened, his father-in-law would at least get
something MRL3701 Assessment 2 Semester 2 2024 3 from his
estate. Hence, he repaid the loan that he had obtained from his
father-in-law even though the amount was only due and payable on
30 November 2024. Tebogo has also established that Simphiwe
owns a house in Mamelodi valued at R700 000, household furniture
valued at R300 000 and a motor vehicle valued at R800 000.
Tebogo applies for the compulsory sequestration of Simphiwe’s
estate. Answer the following questions based on the facts given
above: (a) Explain the concept of a voidable preference, and also
discuss what a trustee must prove in order to have such a transaction
set aside by the court. (3 marks)
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