Scribd
Upload
37 views

Tutorial 4

Kaya Bank obtained a judgment against James and his company Gold Fingers for failure to repay a loan. Kaya Bank can initiate bankruptcy proceedings against James as the personal guarantor of the loan. The procedural steps for Kaya Bank to obtain a Receiving and Adjudication Order against James are filing a bankruptcy petition after serving a bankruptcy notice if the debt remains unpaid. Bobok's various businesses suffered losses and he was unable to repay loans to Kaya Bank and Alibaba Bank, as well as credit from suppliers. Kaya Bank obtained a judgment and filed bankruptcy proceedings against Bobok, resulting in a Receiving and Adjudication Order being made. Prior to the order, Bobok transferred several properties

Uploaded by

Azreen Azlan
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
37 views

Tutorial 4

Kaya Bank obtained a judgment against James and his company Gold Fingers for failure to repay a loan. Kaya Bank can initiate bankruptcy proceedings against James as the personal guarantor of the loan. The procedural steps for Kaya Bank to obtain a Receiving and Adjudication Order against James are filing a bankruptcy petition after serving a bankruptcy notice if the debt remains unpaid. Bobok's various businesses suffered losses and he was unable to repay loans to Kaya Bank and Alibaba Bank, as well as credit from suppliers. Kaya Bank obtained a judgment and filed bankruptcy proceedings against Bobok, resulting in a Receiving and Adjudication Order being made. Prior to the order, Bobok transferred several properties

Uploaded by

Azreen Azlan
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

UIS 4612- Law of Insolvency

Tri 2, 2020/21
TUTORIAL 4 [For academic purpose only]
Question 1 [adopted from CLP Year 2016 Question 8(a)]
James is the shareholder of a company, Gold Fingers Sdn. Bhd. which is in the business of
selling gold. James obtained a loan of RM8,000,000.00 from Kaya Bank. As security for the
loan, James gave to Kaya Bank a personal Guarantee for the same amount.
There is a robbery in the premises of Gold Fingers Sdn. Bhd. and all the gold was stolen. As a
result of the robbery, Gold Fingers Sdn. Bhd. had no more gold to sell and was unable to keep
up with the loan repayments to Kaya Bank.
Kaya Bank obtained Judgment against James and Gold Fingers Sdn. Bhd. and now comes to
you to seek advice in respect of further legal proceedings against each of them.
(a) Who can Kaya Bank go against in bankruptcy proceedings and what are the procedural
steps involved to obtain Receiving and Adjudicating Order? [Now known as Bankruptcy
Order]
(10 marks)

Question 2 [adopted from CLP Year 2018 Supplementary Exam Question 8]


Bobok was a successful businessman. His sole proprietorship's company supplied special quail
eggs and durian crisps to various supermarkets in town. Under their respective agreement,
Bobok is given thirty days credit facilities by Kenek-Kenek Sdn. Bhd. and Duu-ree-An Sdn.
Bhd, who is Bobok's supplier for the quail eggs and durian crisps.

As Bobok intends to expand his retail business and also to start venturing into property
development, Bobok applied for a loan facilities from Kaya Bank and Afibaba Bank. His
applications for loan were approved by both banks.

Unfortunately, due to the economic downturn and Bobok's lack of experience in property
development management, his business started to dwindle and Bobok started to suffer losses
in his business. He is unable to pay all his monthly installment to both banks. His credit
facilities to Kenek-Kenek Sdn. Bhd, and Duu-ree-An Sdn. Bhd. remained unpaid for more than
three months. As a result, starting from 30 October 2013, Bobok failed to make any payment
to both Kaya Bank and Alibaba Bank as well Kenek-Kenek Sdn. Bhd. and Duu-ree-An Sdn.
Bhd.

The total debts owed by Bobok to Kaya Bank amounts to RM120,000.00 whilst the sum of
RM250,000.00 is due to Alibaba Bank. By 2014, Bobok's debts to Kenek-Kenek Sdn. Bhd.
dan Duu-ree-An Sdn. Bhd. stood at RM100,000.00 and RM200,000.00 respectively.

Kaya Bank then filed a civil claim against Bobok on I March 2014 for his failure to pay the
necessary installment as specified in their loan agreement, A final judgment was entered
against Bobok for the sum ofRM150,000.00 on 15 May 2014. Until 30 May 2014, the debt

1
remained unpaid by Bobok although the said order was personally served on Bobok on 20 May
2014.

A Bankruptcy Notice was then issued against Bobok on 15 June 2014. The Bankruptcy Notice
was served personally on Bobok on 17 June 2014. As the debt and interest stated in the
Bankruptcy Notice remained unpaid and no counterclaim was filed by 26 June 2014, Kaya
Bank filed a bankruptcy petition in the Shah Alam High Court on 30 December 2014. And
finally, a receiving order and an adjudication order (ROAO) [Now known as Bankruptcy
Order] was entered against Bobok on 12 March 2015. The ROAO was also served personally
on Bobok on 16 March 2015.

Despite being furnished with a copy of instruction for the preparation of his statement of affairs
by the Director General of Insolvency (DGI) as soon as the ROAO had been made against him,
Bobok failed to complete and submit his statement of affairs as instructed by the DGI.

Prior to the ROAO being made by the court, Bobok had in fact performed several transaction
as follows:

12 January 2014 - transfer a piece of land situated in Setapak, Kuala Lumpur which is registered
under his name to one Ismail Pendek. Ismail Pendek is Bobok's eldest brother;

3 February 2014 — sold his shop house situated in Taman Cantik, Kajang to his cousin, Lan
Janggut for a consideration of RM2,000.00. Lan Janggut then in turn sold this property to one
Mr. Ah Chin Chin on 20 May 2015 for a sum of RM2million;

17 March 2015- transfer his bungalow house situated in Changloon, Kedah to one Ms. Suzy
Jen. The land in which the bungalow was built was registered under Bobok's name prior to the
transfer.

Upon becoming aware that Bobok was adjudged as a bankrupt, Alibaba Bank, Kenek-Kenek
Sdn. Bhd. and Duu-ree-An Sdn. Bhd, intends to start their respective civil claims against Bobok
to recover their respective debts from Bobok.

On 4 July 2018, Bobok who is currently working in Johor Bahru as a company director came
to know that the Bankruptcy Act 1967 was amended and there are now provisions on automatic
discharge. Bobok now intends to apply for automatic discharge as he is of the opinion that he
qualifies to be discharged automatically under the new Act as he had been adjudged bankrupt
for more than three years. The company that Bobok is working now is owned by his brother in
law.

a) Explain:
(i) the legal status of the various transfers and conveyances of properties made by Bobok;
(ii) breach of duty of a bankrupt committed by Bobok.
(12 marks)

b) Explain how should Alibabn Bank, Kenek-Kenek Sdn. Bhd, and Duu-reeAn Sdn. Bhd.
proceed to claim for the recovery of their respective debts as Bobok have been adjudged as a
bankrupt.
(5 marks)

2
c) Give your views on whether Bobok had fully complied with the requirement needed to
apply for automatic discharge under the new insolvency law.
(3 marks)

For each answer, you may refer to the relevant provisions under Insolvency Act 1967, as well
as any related cases.

*****

You might also like