Bankruptcy – Page 2

CR – Nov 2017 – L3 – Q6 – Impairment of Assets (IAS 36)

Provide advice on provisions and disclosures for Eko Exports Limited’s financial statements based on events in 2016.

Question

The following information pertains to Eko Exports Limited (EEL) for the financial year ended December 31, 2016:

A customer who owed ₦1 million was declared bankrupt after his warehouse was destroyed by fire on February 10, 2017. It is expected that the customer would be able to recover 50% of the loss from the insurance company.
An employee of EEL forged the signatures of directors and made cash withdrawals of ₦7.5 million from the bank. Of these, ₦1.5 million were withdrawn before December 31, 2016. Investigations revealed that an employee of the bank was also involved, and under a settlement arrangement, the bank paid 60% of the amount to EEL on January 27, 2017.
EEL has filed a claim against one of its vendors for supplying defective goods. EEL’s legal consultant is confident that damages of ₦1 million would be paid to EEL. The supplier has already reimbursed the actual cost of the defective goods.
A suit for infringement of patents, seeking damages of ₦2 million, was filed by a third party. EEL’s legal consultant is of the opinion that an unfavorable outcome is most likely. Based on past experience, he has advised that there is a 60% probability that the amount of damages would be ₦1 million and a 40% likelihood that the amount would be ₦1.5 million.

Required:
Advise EEL about the amount of provision that should be incorporated and the disclosures that are required to be made in the financial statements for the year ended December 31, 2016.
Total: 15 Marks

Answer

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Tags: Bankruptcy, Contingent Liabilities, Forgery, Legal claims, Provisions
Level: Level 3

Topic: Impairment of Assets (IAS 36)
Series: NOV 2017

BL – Nov 2020 – L1 – SB – Q2c – Company Law

Differentiate insolvency from bankruptcy and outline consequences of insolvency.

Question

Insolvency occurs when a company is unable to pay its debts.

Required:
i. Distinguish insolvency from bankruptcy.
ii. Explain briefly the consequences of insolvency on a company.

Answer

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Tags: Bankruptcy, Corporate Consequences, Financial Distress, Insolvency
Level: Level 1

Topic: Company Law
Series: NOV 2020

BL – May 2012 – L1 – SB – Q2C – Company Law

State two powers of an Official Receiver appointed to manage a debtor's property.

Question

An Official Receiver is usually appointed by the court to take over the management of the property of a debtor. You are required to state TWO powers of an Official Receiver.

Answer

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Tags: Bankruptcy, Business Law, Official Receiver
Level: Level 1

Topic: Company Law
Series: MAY 2012

BL – May 2012 – L1 – SA – Q20 – Law Relating to Banking

Identify the legal term for the state taking possession of a debtor's property.

Question

The proceedings whereby the State takes over the possession of the property of a debtor and distributes them among persons whom the debtor owes money is known as:

A. Bankruptcy
B. Matrimonial causes proceedings
C. Lifting the veil proceedings
D. Garnishee proceedings
E. Binding over proceedings

Answer

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Tags: Bankruptcy, Business Law, Proceedings
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2012

BL – May 2012 – L1 – SA – Q8 – Partnership Law

Identify the activity that an un-discharged bankrupt cannot engage in.

Question

In which of the following shall an un-discharged bankrupt NOT engage?

A. Travel outside the country
B. Attend shareholders’ meeting of a company
C. Enjoy public amenities
D. Contest in an election for an elective office
E. Contribute to a public debate

Answer

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Tags: Bankruptcy, Business Law, Restrictions
Level: Level 1

Topic: Partnership Law
Series: MAY 2012

BL – Nov 2011 – L1 – SB – Q2d – Partnership Law

Understanding the concept of deferred debts in bankruptcy and providing examples.

Question

Define “Deferred Debts” in bankruptcy proceedings and give any THREE examples.

Answer

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Tags: Bankruptcy, Debt Hierarchy, Deferred Debts
Level: Level 1

Topic: Partnership Law
Series: NOV 2011

BL – Nov 2011 – L1 – SA – Q16 – Law of Trusts

Identifying the legal process where a debtor assigns assets to a trustee to avoid bankruptcy.

Question

In order to avoid being declared bankrupt, a debtor may assign substantially all his assets to a trustee by executing what is known as ………………………………

Answer

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Tags: Assignment of Assets, Bankruptcy, Trustee
Level: Level 1

Topic: Law of Trusts
Series: NOV 2011

BL – Nov 2011 – L1 – SA – Q15 – Agency Law

Identifying the person responsible for getting in and distributing the assets of a bankrupt individual.

Question

Who is usually appointed for the purpose of getting in and distributing the assets of a bankrupt?

Answer

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Tags: Assets, Bankruptcy, Trustee
Level: Level 1

Topic: Agency Law
Series: NOV 2011

BL – Nov 2012 – L1 – SA – Q19 – Contract Law

Identify the legal activity that an undischarged bankrupt is not incapacitated from doing.

Question

An undischarged bankrupt is NOT legally incapacitated to do ONE of the following:

A. To marry a wife
B. To be elected into an elective office
C. To be appointed to or to act in the office of a Justice of Peace
D. To be appointed as a trustee of a trust estate
E. To be admitted to serve on a governing board of a statutory institution

Answer

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Tags: Bankruptcy, Legal Incapacities
Level: Level 1

Topic: Contract Law
Series: NOV 2012

BL – May 2013 – L1 – SB – Q6A – Law Relating to Banking

State three reasons a creditor may present a bankruptcy petition against a debtor.

Question

Explain THREE reasons for which a creditor shall be entitled to present a bankruptcy petition against a debtor.

Answer

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Tags: Bankruptcy, Creditor’s Petition, Liquidated Debt
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2013

BL – May 2013 – L1 – SA – Q20 – Law Relating to Banking

This question tests the authority of the court regarding the discharge of a bankrupt.

Question

Which court has the power to order the discharge of a bankrupt?

Answer

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Tags: Bankruptcy, Court Authority, Discharge
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2013

BL – May 2013 – L1 – SA – Q20 – Law of Trusts

This question tests knowledge of which entities cannot be declared bankrupt.

Question

Which of the following CANNOT be made a bankrupt?

A. A company
B. A Nigerian
C. A partnership
D. A foreigner who lives in Nigeria
E. A foreigner who has a place of business in Nigeria

Answer

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Tags: Bankruptcy, Insolvency, Legal Status
Level: Level 1

Topic: Law of Trusts
Series: MAY 2013

BL – May 2013 – L1 – SA – Q11 – Law Relating to Banking

This question tests the knowledge of the official responsible for administering a debtor's estate in bankruptcy.

Question

The person charged with the duty of administering a debtor’s estate in a bankruptcy proceeding is known as the:

A. Liquidator
B. Official Receiver
C. Registrar of the Supreme Court
D. Auctioneer
E. Executor

Answer

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Tags: Bankruptcy, Insolvency, Official Receiver
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2013

BL – May 2014 – L1 – SA – Q19 – Law Relating to Banking

Identifying the term for a bankruptcy petition against a common debtor.

Question

Bankruptcy petition by a group of creditors who acts together against a common debtor who is known to be insolvent is a ____________.

Answer

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Tags: Bankruptcy, Creditors, Insolvency
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2014

BL – May 2014 – L1 – SA – Q20 – Law Relating to Banking

Identifying which court has original jurisdiction in bankruptcy cases.

Question

The court that has original jurisdiction to entertain a suit on bankruptcy is:
A. State High Court
B. Sharia Court of Appeal
C. National Industrial Court
D. Customary Court of Appeal
E. Federal High Court

Answer

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Tags: Bankruptcy, Court Jurisdiction, Legal Procedure
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2014

BL – Nov 2013 – L1 – SB – Q6b – Agency Law

Stating three acts of bankruptcy for which proceedings may be instituted.

Question

A debtor who could not pay his debts or meet his legal financial obligations may be insolvent.

You are required to:
State THREE acts of bankruptcy for which bankruptcy proceedings may be instituted against a debtor.

Answer

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Tags: Bankruptcy, Insolvency, Legal Financial Obligations
Level: Level 1

Topic: Agency Law
Series: NOV 2013

BL – Nov 2013 – L1 – SA – Q20 – Law of Trusts

Question about the minimum debt amount required to file a bankruptcy petition.

Question

A creditor shall not be entitled to present a bankruptcy petition against the debtor where the debt is less than ……………………………………….

Answer

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Tags: Bankruptcy, Creditor, Debt Threshold, Debtor, Legal Proceedings
Level: Level 1

Topic: Law of Trusts
Series: NOV 2013

BL – Nov 2013 – L1 – SA – Q19 – Law Relating to Banking

Identifies the condition under which a debtor is considered bankrupt.

Question

A debtor is said to be bankrupt when

A. A creditor obtains a final court order against him
B. A court declares that he is solvent
C. He pays his debts
D. He promises to pay his creditors
E. The creditors do not trust him

Answer

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Tags: Bankruptcy, Creditor's Rights, Insolvency Law, Multiple Choice
Level: Level 1

Topic: Law Relating to Banking
Series: NOV 2013

BL – May 2015 – L1 – SB – Q1c – Company Law

Explain the term "Insolvency" and state four consequences of insolvency.

Question

An insolvent person cannot properly manage his personal affairs.
i. Explain briefly the term “Insolvency”. (2 Marks)
ii. State FOUR consequences of Insolvency. (4 Marks)

Answer

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Tags: Bankruptcy, Insolvency, Personal Affairs
Level: Level 1

Series: MAY 2015

BMIS – Nov 2016 – L1 – Q4a – Business and organisational structure

State reasons that may influence a company or government to undertake a divestiture program.

Question

State FOUR reasons that may influence a company or government to undertake a divestiture programme.

(8 marks)

Answer

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Tags: Bankruptcy, Business Strategy, Divestiture, Fundraising, Organizational Structure
Level: Level 1

Topic: Business and Organisational Structure
Series: NOV 2016

Question Tag: Bankruptcy

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CR – Nov 2017 – L3 – Q6 – Impairment of Assets (IAS 36)

Provide advice on provisions and disclosures for Eko Exports Limited’s financial statements based on events in 2016.

You're reporting an error for "CR – Nov 2017 – L3 – Q6 – Impairment of Assets (IAS 36)"

BL – Nov 2020 – L1 – SB – Q2c – Company Law

Differentiate insolvency from bankruptcy and outline consequences of insolvency.

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BL – May 2012 – L1 – SB – Q2C – Company Law

State two powers of an Official Receiver appointed to manage a debtor's property.

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BL – May 2012 – L1 – SA – Q20 – Law Relating to Banking

Identify the legal term for the state taking possession of a debtor's property.

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BL – May 2012 – L1 – SA – Q8 – Partnership Law

Identify the activity that an un-discharged bankrupt cannot engage in.

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BL – Nov 2011 – L1 – SB – Q2d – Partnership Law

Understanding the concept of deferred debts in bankruptcy and providing examples.

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BL – Nov 2011 – L1 – SA – Q16 – Law of Trusts

Identifying the legal process where a debtor assigns assets to a trustee to avoid bankruptcy.

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BL – Nov 2011 – L1 – SA – Q15 – Agency Law

Identifying the person responsible for getting in and distributing the assets of a bankrupt individual.

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BL – Nov 2012 – L1 – SA – Q19 – Contract Law

Identify the legal activity that an undischarged bankrupt is not incapacitated from doing.

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BL – May 2013 – L1 – SB – Q6A – Law Relating to Banking

State three reasons a creditor may present a bankruptcy petition against a debtor.

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BL – May 2013 – L1 – SA – Q20 – Law Relating to Banking

This question tests the authority of the court regarding the discharge of a bankrupt.

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BL – May 2013 – L1 – SA – Q20 – Law of Trusts

This question tests knowledge of which entities cannot be declared bankrupt.

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BL – May 2013 – L1 – SA – Q11 – Law Relating to Banking

This question tests the knowledge of the official responsible for administering a debtor's estate in bankruptcy.

You're reporting an error for "BL – May 2013 – L1 – SA – Q11 – Law Relating to Banking"

BL – May 2014 – L1 – SA – Q19 – Law Relating to Banking

Identifying the term for a bankruptcy petition against a common debtor.

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BL – May 2014 – L1 – SA – Q20 – Law Relating to Banking

Identifying which court has original jurisdiction in bankruptcy cases.

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BL – Nov 2013 – L1 – SB – Q6b – Agency Law

Stating three acts of bankruptcy for which proceedings may be instituted.

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BL – Nov 2013 – L1 – SA – Q20 – Law of Trusts

Question about the minimum debt amount required to file a bankruptcy petition.

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BL – Nov 2013 – L1 – SA – Q19 – Law Relating to Banking

Identifies the condition under which a debtor is considered bankrupt.

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BL – May 2015 – L1 – SB – Q1c – Company Law

Explain the term "Insolvency" and state four consequences of insolvency.

You're reporting an error for "BL – May 2015 – L1 – SB – Q1c – Company Law"

BMIS – Nov 2016 – L1 – Q4a – Business and organisational structure

State reasons that may influence a company or government to undertake a divestiture program.

You're reporting an error for "BMIS – Nov 2016 – L1 – Q4a – Business and organisational structure"

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