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Issues:
Distribution of funds between workers and secured creditors in a liquidation scenario. Analysis: The Textile Labour Association sought direction from the court to instruct the Official Liquidator (O.L.) to pay a specific amount from the sale proceeds of a company's assets. The dispute centered around determining the ratio between the workers and the Secured Creditors. Two reports from a Chartered Accountant were crucial in this matter. The first report calculated the workers' claim at 56.81% and the Secured Creditors' claim at 43.19%. The second report revised these figures to 55.97% for workers and 44.03% for Secured Creditors. The question arose whether the Secured Creditors with both first and second charges should be considered as a whole while determining the ratio. The applicant, through their advocate, decided not to press for a specific order regarding this issue due to the minimal 1% difference between the two reports. The Secured Creditors' advocates also requested the court to keep the issue open. Consequently, the court directed the O.L. to distribute the funds based on the ratio from the second report of the Chartered Accountant - 55.97% for workers and 44.03% for Secured Creditors. This distribution ratio would apply to future distributions, including proceeds from the sale of land. Any previous distributions could be adjusted accordingly based on this new ratio. Following this directive, the Secured Creditors were given the liberty to determine the distribution among themselves based on their priority claims. The court disposed of the application with this decision, providing clarity on the distribution of funds between workers and Secured Creditors in the liquidation process.
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