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Chapter 6:04

Insolvency Act

Acts 13/1973, 39/1973 (s. 47), 61/1973 (s. 9), 45/1974, 25/1976, 37/1977 (s. 20), 15/1981, 29/1981, 24/1982, 18/1989 (s. 25), 22/1992 (s. 12), 20/1994 (s. 12), 16/1998 (s. 69), 22/1998, 22/2001 (s. 4), 12/2002 (s. 85). R.G.N 1135/1975. S.I. 519/1981.

ARRANGEMENT OF SECTIONS

PART I

PRELIMINARY Section

  1. Short title.

PART II

SEQUESTRATION AND ATTACHMENTOF ESTATE

Voluntary Surrender

  1. Petition for surrender.
  2. Provisional acceptance of surrender and issue of rule nisi.
  3. Publication of rule nisi.
  4. Final acceptance of surrender.
  5. Discharge of rule nisi.
  6. Costs of attachment and control of property and administration of estate.
  7. Sale of assets if costs and expenses not paid.
  8. Sale of assets not claimed.

Compulsory Sequestration

  1. Acts of insolvency.
  2. Petition for sequestration of estate.
  3. Order of provisional sequestration.
  4. Service of rule nisi.
  5. Final order of sequestration or discharge of provisional order.

Miscellaneous

  1. Sequestration of partnership estate.
  2. Petitioning creditor to prosecute sequestration until trustee appointed and liable for contribution.
  3. Malicious or vexatious petitions.
  4. Insolvent and spouse to deliver records and lodge statements.

Attachment and Custody of Estate

  1. Notice of sequestration.
  2. Attachment of property by deputy sheriff.
  3. Messenger to transmit attached property to Master. PART III

EFFECTS OFSEQUESTRATION

Effect upon Insolvent, Spouse of Insolvent and their Property

  1. Immediate effect of sequestration order.
  2. Effect of sequestration on property of spouse of insolvent.
  3. Application to High Court to stay or exclude vesting of property of spouse temporarily.
  4. Trustee to give notice of intention to realize property of spouse.
  5. Trustee to release property.
  6. Application to High Court for release of property.
  7. Creditors of spouse may prove claims.
  8. Property of spouse to bear proportionate share of costs of sequestration.
  9. Excussion of property of spouse.
  10. Creditors of spouse not liable for costs of sequestration and may not vote at certain meetings.
  11. Application for sequestration of estate of spouse may be postponed by High Court.
  12. Payment of debts after sequestration.
  13. Powers, duties and privileges of insolvent during sequestration.
  14. Examination of insolvent in relation to affairs since sequestration.
  15. Power of Master to have movable property sold.
  16. Property acquired after sequestration and alienated by insolvent.
  17. Estate to remain vested in trustee until composition or rehabilitation.

Effect upon Antecedent Transactions

  1. Dispositions without value.
  2. Antenuptial contracts.
  3. Voidable preferences.
  4. Undue preferences.
  5. Collusive dealings.
  6. Proceedings to set aside improper disposition.
  7. Improper dispositions do not affect certain rights.
  8. Sale of business.
  9. Contracts to buy immovable property.
  10. Sales for cash.
  11. Property of another in possession of insolvent.

PART IV

MEETINGS OF CREDITORS

Meetings: How Convened and When

  1. Time and place of meetings.
  2. First and second meetings.
  3. General meetings.
  4. Special meetings.
  5. Creditor may register with trustee.
  6. Proof of liquidated claims.
  7. Trustee to examine claims.
  8. Set-off.
  9. Right of retention and landlord’s legal hypothec.
  10. Proof of conditional claims.
  11. Claim against partnerships.
  12. Arrear interest.
  13. Withdrawal of claim.

Voting at Meetings

  1. Right to vote and reckoning of votes
  2. Questions upon which creditors may vote.

Examination of Insolvent and Others

  1. Insolvent and others to attend meetings.
  2. Interrogation of insolvent and others.
  3. Enforcing summonses and giving of evidence.
  4. Steps to be taken on suspicion of offence.
  5. Presumption as to record of proceedings and validity of acts at meeting of creditors.

PART V

APPOINTMENT AND REMOVALOFTRUSTEES

  1. Appointment of provisional trustee.
  2. Election of trustee.
  3. Qualifications and disqualifications for appointment or election as trustee.
  4. Appointment of trustee by Master.
  5. Where Master declines to appoint trustee.
  6. Vacation of office of trustee.
  7. High Court may disqualify person from being trustee or remove trustee.
  8. Master may remove trustee.
  9. Leave of absence or resignation of trustee.
  10. Election of new trustee.
  11. Remuneration of trustee.

PART VI

LIQUIDATION AND DISTRIBUTIONOF ESTATE

Duties and Powers of Trustee in Liquidation of Estate

  1. Trustee to take charge of property of estate.
  2. Opening of bank account.
  3. Record of all receipts.
  4. Unlawful retention of moneys or use of property by trustee.
  5. Trustee may obtain legal and other advice.
  6. Improper advising or conduct of legal proceedings.
  7. Legal proceedings against estate.
  8. Continuance of pending legal proceedings by surviving or new trustee.
  9. Recovery of debts due to estate.
  10. Extension of time for payment or compounding of debts and arbitration.
  11. Subsistence allowance for insolvent and family.
  12. Continuation of insolvent’s business.
  13. Trustee’s report to creditors.
  14. Sale of property.
  15. Realization of securities.
  16. Cession of book debts.

Costs and Preferent Claims

  1. Funeral and death-bed expenses. 100. Costs of sequestration.
  2. Costs of execution.
  3. Contributions to certain funds.
  4. Salary or wages.
  5. Income tax.
  6. Capital gains tax.
  7. Value added tax.
  8. Farmers’ stop-orders.
  9. Notarial bonds.
  10. Non-preferent claims.

Secured Claims 110. Exclusion or limitation of preference under legal hypothec.

  1. Mortgage bonds.
  2. Pledge or cession of movable property. 113. Costs to which securities are subject.

Distributions

  1. Application of proceeds of securities.
  2. Late proof of claims.
  3. Creditor debarred from participating in certain proceeds.

Contributions

  1. Contributions by creditors towards costs of sequestration when free residue insufficient.

Trustee’s Accounts 118. Liquidation account and plan of distribution or contribution.

  1. Extension of time for lodging trustee’s account.
  2. Master may direct trustee to lodge plan.
  3. Form of liquidation account. 122. Form of trading account.
  4. Form of plan of distribution.
  5. Form of plan of contribution.
  6. Trustee’s account to be verified and amplified.

Confirmation of Account: Dividends and Contributions 126. Inspection of trustee’s accounts by creditors.

  1. Objections and directions to amend trustee’s account.
  2. Confirmation of trustee’s account.
  3. Distribution of estate and collection of contributions from creditors.
  4. Trustee to produce acquittances for dividends or to pay over unpaid dividends to Master.
  5. Application to High Court for order to pay dividend.
  6. Surplus to be paid into Guardian’s Fund until rehabilitation of insolvent.
  7. Failure by trustee to submit account or to perform duties.
  8. Enforcement of order of High Court.
  9. Enforcing payment of contributions.

PART VII

COMPOSITIONSAND REHABILITATIONS

Compositions 136. Offer of composition.

  1. Effect of composition.
  2. Composition by separate partner.
  3. Effect of composition on spouse of insolvent. 140. Functions of trustee under composition.

Rehabilitations 141. Application for rehabilitation.

  1. Security to be furnished prior to application for rehabilitation.
  2. Facts to be averred on application for rehabilitation.
  3. Opposition to or refusal by High Court of rehabilitation.
  4. Partnership cannot be rehabilitated.
  5. Effect of rehabilitation.
  6. Illegal inducements to vote for composition or not to oppose rehabilitation.
  7. Recovery of penalty.

PART VIII

ASSIGNMENT

  1. Interpretation and application of this Part.
  2. Deed of assignment and statement of affairs.
  3. Effect of execution of deed of assignment.
  4. Notice of assignment.
  5. Lodging of copies of deed for inspection.
  6. Effect of publication of notice of assignment.
  7. When deed may be signed.
  8. Deed not signed.
  9. Registration of deed.
  10. Effect of registration of deed.
  11. Notice of assignment to be given to spouse of debtor. 160. Effect of assignment on property of spouse of debtor.
  12. Supervision of assignment by Master.
  13. Powers of assignee.
  14. Law of insolvency applicable.
  15. Powers of High Court.
  16. Costs of assignment.

PART IX

OFFENCESAND PENALTIES

  1. Concealing or destroying books or assets.
  2. Concealment of liabilities.
  3. Failure to keep proper records.
  4. Making undue preferences.
  5. Contracting debts without expectation of ability to pay.
  6. Unreasonable diminution of assets.
  7. Alienation of business without notice.
  8. Failure to give information or to deliver assets, books, etc.
  9. Obtaining credit during insolvency.
  10. Offering inducements.
  11. Failure to lodge statements.
  12. Failure to carry out duties.
  13. Making false statement in statement of affairs.
  14. Failure to attend meetings, etc.
  15. Making false answers on oath while under examination or making false affidavit.
  16. Failure to appear or give evidence.
  17. Failure to appear or give evidence against trustee or assignee.
  18. Acceptance of inducements.
  19. Removal of property.
  20. Criminal liability of partners, administrators, employees or agents.
  21. Criminal liability of trustee and assignee.
  22. Obstructing trustee, curator bonis or assignee.
  23. Evidence of liabilities incurred by insolvent.
  24. [Repealed]

PART X

JUDICIAL

  1. Jurisdiction of High Court. 191. Appeal.
  2. Review

PART XI

MISCELLANEOUS

  1. Master may direct trustee and assignee to deliver books, documents or property or call upon any person to furnish certain information.
  2. Master may direct payment of small amounts.
  3. Fees of office and expenses.
  4. Custody of documents and documentary evidence.
  5. Destruction of documents.
  6. Insurer obliged to pay third party’s claim against insolvent.
  7. Formal defects. 200. Regulations.

AN ACT to make provision for the administration of insolvent and assigned estates; and to provide for matters incidental to the foregoing.

[Date of commencement: lst January, 1975.]

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