MRL3701 TRUE / FALSE 2023 with verified questions and answers

In common parlance, a person may be said to be insolvent when his liabilities, fairly estimated, exceed his assets, fairly valued FALSE A debtor who has no assets and only liabilities cannot surrender his estates TRUE When the debtor applies for voluntary surrender, the debtor's affidavit, verifying that the statement of affairs is true and complete and that every estimated amount contained in it is fairly and correctly estimated, may be attested by the applicant's attorney. FALSE The debtor commits an act of insolvency if he gives notice in writing of inability to pay any single one of his debts TRUE The court may exercise its discretion to refuse to grant a sequestration order if the debtor has instituted an action for damages against the creditor which, if successful will wipe out the creditor's claim TRUE While Sam is under sequestration she breaks Tim's jaw in a fist fight and so Sam, not the trustee of Sam's insolvent estate, may now be sued by Tim for delictual damages. TRUE Boris green, the trustee of the duly constituted Smith Family Trust, buys a car with moneys deposited in that duly constituted trust fund, and when Boris's personal estate is later sequestrated that car falls into his insolvent estate FALSE A solvent wife will not be able to obtain the release of property which was donated to her by her husband while she knew that he was going to apply for the voluntary surrender of his estate. TRUE Britney's estate is sequestrated before she has been registered as the new owner of the farm that she bought from Allan, and so if the trustee of Britney's estate duly elects to uphold this contract to buy Allan's farm the court will probably grant Allan an order requiring Britney's trustee to pay Allan the purchase price if there are no good reasons why Britney's trustee should refuse to pay the purchase price to Allan. TRUE The seller acquires no hypothec under section 84(1) of the Insolvency Act if the seller, prior to sequestration, cancelled the installment agreement on account of the buyer's failure to pay an installment and the purchaser did not obtain the required reinstatement. TRUE If a creditor considers that the minutes of a creditors' meeting do not adequately show that, in that meeting, the insolvent admitted inheriting a house, that creditor may give evidence himself before the Master to prove the admission made by the insolvent at the creditors' meeting TRUE If the creditors have elected a trustee unlawfully the Master may exercise his discretion to appoint this person as the trustee if he was the only candidate nominated by the creditors present and entitled to vote at the creditors' meeting FALSE If the trustee wishes to set aside a disposition without value under section 26 of the Insolvency Act, he or she must prove that the insolvent intended to prefer one of his or her creditors above another. FALSE If the trustee wishes to set aside a voidable preference under section 29 of the Insolvency Act he or she must prove that the insolvent intended to prefer one of his or her creditors above another FALSE If the business owns a lorry which the trader intends to pledge to the bank as security for a loan by the bank to the business, then the trader does not need to advertise this intended transfer of the lorry under section 34(1) of the Insolvency Act. TRUE A secured creditor is always a preferent creditor, but a preferent creditor may not necessarily be a secured creditor TRUE The employee has a preferent claim to any contributions which were, immediately prior to sequestration, owing by the insolvent in his capacity as employer to any pension, provident, medical aid, sick pay, holiday, unemployment or training scheme or fund, or to any similar scheme or fund, to a maximum of R12 000 in respect of each scheme or fund FALSE If the creditors accept an offer of compromise because they feel sorry for the insolvent, even though they know that the offer of compromise is not in the interests of the estate or for the benefit of creditors generally, the acceptance is not valid. TRUE If Tenza, before becoming insolvent, had thrown away all his financial records and had no way of knowing how much he owed his creditors, the court eventually hearing Tenza's application for rehabilitation might decide that, because he was now earning a substantial remuneration package in his new job, he should be rehabilitated only if he paid the balance of the trustee's fees. TRUE When granting an order for the compulsory sequestration of the Absolutely Wonderful Partnership estate, the court need not simultaneously sequestrate the private estates of the partners who live in Saudi Arabia, and the private estates of the partners who initially contributed money to the partnership but do not take part in the management and business of the partnership. TRUE Although the assets of Bravo Co Pty Ltd exceed its liabilities the court may still grant an order for the winding up of the company on the ground that one of its creditors, Colin, to whom the company owes a due debt of R1000 left a demand for payment at the company's registered office and the company then for three weeks neglected to pay, secure, or compromise the claim to Colin's satisfaction. TRUE A composition in terms of section 72 of the CC Act may have the effect of setting aside the winding up of the corporation TRUE The affected person who applies to court for the compulsory business rescue of a company is not required to show a reasonable probability that the company can be rescued, but merely a prima facie case that the company can be rescued FALSE