Cuppycakes Pte Ltd (Cuppycakes) is a confectionary business. In January 2009, the board of directors took a loan from Future Bank to set up a new retail outlet in Jurong. To secure the loan, Future Bank took a fl oating charge over the undertaking of Cuppycakes. Cuppycakes is now in the process of winding up. The main claims against Cuppycakes are:(i) a S1·5 million mortgage by Present Bank over Cuppycakes’ factory in Bedok;(ii) $80,000 in respect of a debt due to a supplier;(iii) $100,000 unpaid taxes owing to the Inland Revenue Authority of Singapore; and(iv) Future Bank’s fl oating charge.Future Bank has realised that the fl oating charge over the undertaking of Cuppycakes was never registered with the Accounting and Corporate Regulation Authority.Required:(a) Discuss whether Future Bank’s fl oating charge is enforceable. (5 marks)(b) Explain the order of priority of payment in respect of the above claims in Cuppycakes’ winding up. (5 marks)
