11. What effect does liquidation have on secured creditors of a company?

a) In the event of default, secured creditors can exercise their powers to sell the company’s assets which have been charged to them as security in order to satisfy the debts in accordance with the law.

b) Should there be any shortfall therefrom, secured creditors may file proof of debt and they will consequently be regarded as unsecured creditors.

c) Secured creditors are required to hand over the remaining proceeds from the sale of the company’s asset to the liquidator to be credited into the estate of the company.