26. Banking and financial problems
Lemon industries borrowed money to buy a new factory. They have been unable to repay the loan. The factory was the security for the loan, and the bank is now going to take possession of it and sell it to recovery the debt.
Conflict of interests
Susan Green is a scientist. She has been appointed by the government to investigate any health risks connected with fizzy drinks. However, she also regularly works as consultant for ColaCo, a major fizzy drinks manufactory.
Shootemup is a developer of computer games. Producing new games is expensive, and they do not have enough money to bring out new games as often as their competitors.
Jane Jackson looked at her bank statement, and found that somebody had used her bank details to pay for 1,000 liters of diesel fule in Moscow. She has never been to Russia.
A criminal gang used money from drug-dealing to buy antiques for cash, which they then sold at public auction.
Insider dealing/ trading
Greg Davis knew that his company was secretly planning to buy a profitable subsidiary. He bought a lot of shares in his own company. When the acquisition was announced, she share price went up, and he made a lot of money.
The democratically elected president of the country was deposed in a military coup. Many investors withdrew their capital in order to deposit it in other country.
Until she was discovered, Tina Edwards managed to steal f100,000 from the pension fund she was managing.
Credit card cloning
When Lan Barlow paid for a restaurant meal, the waiter took his credit card away for several minutes. A month later, Lan found that a copy of his card had been used to buy some diamonds in Colombia.
Geoff Parker persuaded several people to invest substantial sums of money in a company which did not exist. He then took the money and disappeared.
Turkey Trading own large sums of money to several creditors. There is virtually no chance that they will be able to repay these debts, and the company will probably go into liquidation.
Using some special paper and a color photocopier, Henry Black has been making counterfeit 100 euro notes in his garden shed.
1. An insolvent company often goes into liquidation. A private individual who can not pay his/her debts may be declared __________.
a. bankrupt b. indebted c. penniless
2. A bankrupt person’s _________ can be taken and used to repay his/her debts.
a. things b. items c. property
3. A person who has not yet completed this process is called ______ an bankrupt.
a. unfinished b. incomplete c. undischarged
4. The technical meaning of insolvency is that a person or company’s _______ exceeds their assets.
a. payments b. liabilities c. expenses
5. When a limited company becomes insolvent, it is likely to go into _________.
a. liquid b. liquidity c. liquidation
6. The person responsible for winding up a company which goes into liquidation is called the _________.
a. liquid b. liquidator c. liquidiser
7. When all the assets of a company have been used as security for a loan, and the company defaults on repayments, the lender may force the company to go into ____.
a. receivership b. reception c. reciprocation
8. In this case, a receiver will be appointed to ______ the assets of the company in order to repay the debt.
a. sell b. trade c. realize
9. A mistake in an account is often called a _______.
a. disturbance b. distraction c. discreptioncy
10. Supermarket chains have a ______ interest in keeping agricultural subsidies high, as they make food cheaper to buy from farmers.
a. invested b. vested c. vestal
11. A force majeure is an ______ event such as strike, riot or natural disaster which prevent a contract from being ______.
a. unforeseen /fulfilled b. unseen/fulfilled c. unforeseen/filled
12. Many contracts contain a force majeure _______ to cover this situation.
a. sentence b. phrase c. clause