Nofunds Company is in severe financial difficulty. It has lost a major customer and its cash flows have diminished to the extent that the company cannot pay its financial obligations as they fall due. The company owes 75 million dong in unpaid wages to its employees, 150 million dong to the bank on an unsecured overdraft, 300 million dong on a mortgage secured on its business premises and 200 million dong to unsecured creditors. The general director of the company repaid a debt of 600 million dong due to a bank, this borrowing being supported by his personal guarantee.The total assets of the company are estimated to be 500 million dong.Required:
(b) Explain the order in which payments would be made by the liquidator under the provisions of the Law on Bankruptcy. (5 marks)
