TUESDAY: 6 December 2022. Afternoon Paper. Time Allowed: 3 hours.
Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper.
QUESTION ONE
1. Distinguish between “debt management” and “debt protection plan”. (4 marks)
Outline FOUR elements of a debt management plan. (4 marks)
2. Identify THREE instances when mediation is deemed to have been terminated. (6 marks)
3. Describe THREE instances where the provisions of modern laws on cross border insolvency by United Nations Commission on International Trade Law (UNCITRAL) are applicable in your country jurisdiction. (6 marks)
(Total: 20 marks)
QUESTION TWO
1. With reference to Insolvent Act 2015, state FOUR characteristics of a company in financial distress. (4 marks)
2. Explain THREE ways that could be used to expel a partner in a partnership. (6 marks)
3. Describe the process of raising complaints against a licensed auctioneer. (10 marks)
(Total: 20 marks)
QUESTION THREE
1. Enumerate FOUR techniques used to avoid bankruptcy. (4 marks)
2. With reference to alternatives to bankruptcy:
Explain the term “summary instalment order”. (2 marks)
State SIX types of information contained in an application for summary installment order. (6 marks)
3. Examine FOUR general principles of Alternative Dispute Resolution (ADR). (8 marks)
(Total: 20 marks)
QUESTION FOUR
1. Explain the following terms:
Foreign limited partnership. (2 marks)
Stay of legal proceedings. (2 marks)
2. Mauzo Sacco is an employee-based Sacco for employees of DTN Company Limited. DTN Company Ltd. deals in
manufacturing and packaging business at the EPZ industrial park. The company’s major source of raw materials is Eastern Europe. Due to the ongoing Russia-Ukraine war, the firm has been out of production since Mid-March 2022.
Barley, a major raw material, has been in short supply. Due to these disruptions, the employees have not been paid
for the last six months. A corporate loan of Sh.400 million and suppliers bills of Sh.2 billion are outstanding. The net salaries and Sacco employees’ deductions to the Sacco for six months have not been paid. Some of the creditors have applied for creditors’ liquidation as a way of recovering their debts.
Required:
As an expert in debt management appointed by the Chief Executive Officer of the Sacco, assess FOUR effects of
liquidation on the outstanding employees’ compensation (8 marks)
3. Describe FOUR offences under the Insolvency Act, 2015 for which an undischarged bankrupt could be found liable. (8 marks)
(Total: 20 marks)
QUESTION FIVE
1. List FOUR circumstances that may lead to a break-up of a partnership. (4 marks)
2. Examine FOUR aspects that are generally covered by insolvency law in your country. (8 marks)
3. Describe FOUR features that would be embedded in a security rights system to protect the interests of persons who avail immovable property as security. (8 marks)
(Total: 20 marks)
