Shop Fittings

im stuck on my assignment can anybody help?

In 1996, Christopher bought the freehold of an empty shop for £95,000. Title to the property is registered at The Land Registry. The property included living accommodation (a flat) above the shop. Christopher borrowed money from his Uncle Stanley both to finance the purchase and to cover the cost of fitting out the shop and redecorating the flat. The total sum he borrowed was £125,000. He gave Uncle Stanley a first legal charge over the freehold as security for repayment of the loan and Uncle Stanley registered the charge at The Land Registry. Having completed the purchase, Christopher opened up as a newsagent/general store in the shop premises and moved into the living accommodation above. With the money borrowed from Uncle Stanley he refitted the shop, installing new shelving (costing £5,000) and refrigerators and display cabinets (costing £10,000). He also installed a central heating boiler and radiators in the flat at a cost of a further £5,000. In 2001, Christopher found himself facing a financial crisis and to stave off bankruptcy he borrowed £60,000 from NatWest, giving them a second charge over the freehold, which was duly registered. However, Christopher’s financial fortunes did not improve and his trade creditors (his suppliers) have now obtained a bankruptcy order against him. Christopher has paid all interest on loans up to date but has not repaid any of the loan capital. The business is now valued at £165,000, which includes (a) the freehold of the shop and the flat (the valuers say £120,000, excluding shop fittings and the flat’s central heating system), (b) shop fittings – the shelving, refrigerators, display cases, etc (valued at cost) (c) the central heating in the flat (the valuers say £5,000 for this) (c) the goodwill of the business (the valuers say £25,000). Assuming that the business is sold by Christopher’s trustee in bankruptcy for £165,000 as per the valuation, how much will (a) Uncle Stanley (b) NatWest and (c) the trustee in bankruptcy receive respectively from the proceeds of sale?

Public Comments

1. I'm not going to sort out the whole of this problem question for you, however, a couple of interesting things to watch out for: The 125,000 loan was given to C for specified purposes. Does this have trust implications? If so, was the installation of a central heating system a misuse of the funds? If so, can S trace into the central heating system?
2. Rick... are you going to post ALL your coursework on here for answers on the grounds you're 'a little bit stuck'??? You seem to be 'a little bit stuck on about 7 different questions!!! Isn't that a little bit cheating?