KENYA SCHOOL OF LAW COUNCIL OF LEGAL EDUCATION THE ADVOCATES TRAINING PROGRAMM (ATP) 2009/2010 ACADEMIC YEAR COMMERCIAL

TRANSACTIONS (UNIT 9) NOTES BY JUSTUS A. WABUYABO ON INSOLVENCIES DOCUMENTATION

INTRODUCTION
What

is it about?

Notices Petitions, appointments, notices to the parties after the petition has been filed Standard forms to be considered Administration of bankruptcies Appointment of receivers, filing of documents at the companies registries bankruptcy officers, court processes Final orders & documentation, proof of debts Distribution (payment of debts, deed of arrangement / scheme of arrangement/ composition, discharges, vestment orders & documentation, statement of affairs/ substantive law)

TEXTS
Bankruptcy

Act (Cap. 53)

HLE

SCOPE

Bankruptcy Process

What is bankruptcy?
Brief Definition HLE p. 250 bankruptcy is a proceeding by which this state takes possession of the property of a debtor to realize and distribute it rateably amongst persons to whom the debtor owes money. The state does this through its officer called the Official Receiver (OR). What constitutes bankruptcy? See section 3 of cap. 53

CONSEQUENCES OF BANKRUPTCY
During bankruptcy proceedings a debtor obtains certain immunities from suits from his creditors and after it is determined that he was not guilty of serious misconduct leading to his bankruptcy, he can be discharged from his debts and liabilities. The determination of innocence is done through what is called public examination of the debtor. The consequences of bankruptcy are that one subjects himself to certain disqualifications as a citizen e.g. Being disqualified to run for MP or to hold certain public offices.

REQUEST FOR ISSUE OF BANKRUPTCY NOTICE

Once it is established that one has committed an act of bankruptcy, request for the issuance of a BN. Request - Form No. 4 File request with draft BN Creditor required to produce to the Registrar or DRegistrar of the HC a copy of the judgment or order on which the notice is founded.

BANKRUPTCY NOTICE (BN)

The Registrar who peruses the BN together with accompanying documents and if satisfied, seals them with the seal of the court and issues them to be served on the Debtor. BN Form No. 5
BN requires the Debtor to do the following: Pay the debt decreed or ordered to be paid by him; or To secure or compound for it to the satisfaction of the creditor or court. BN must also tell the Debtor what will be the consequences if he fails to comply with the notice (see BN Endorsement)

SERVICE OF BN
Once

issued BN must be served within 1 month R 102-BN Service personal on debtor Substituted service permitted in special cases

DEBTORS OPTIONS ONCE SERVRED WITH BN

A Debtor who disputes the debt upon which a BN is based may apply to set aside the BN by filing an affidavit (R 101). When that happens, the matter is required to be fixed for hearing to determine that question. If the court determines that no act of bankruptcy was committed it will set aside the BN and declare that no act of bankruptcy was committed under the particular BN.

PETITIONS

Failure to satisfy conditions in a BN, a creditor may file a petition for bankruptcy. What conditions must be fulfilled? (S. 6)

Debt threshold Debt must be liquidated Act of bankruptcy was committed within 3 months of presentation of petition. Debtor domiciled in Kenya or within a year before the filing of petition ordinarily resided or had a house or was doing business in Kenya either partially or through an agent.

FORM OF PETITION
Form No. 9 Caption Citation Attestation Antecedent formality Receivers fees.

CONTENTS OF A PETITION

Identify Debtor (Name and address) Must specify that the Debtor is resident or carries on biz in Kenya Set out the amount of the debt That no security is held for the debt or that if held that the creditor is willing to give it up That act of bktcy was committed within 3 months. Identify act of bktcy

VERIFYING AFFIDAVIT

A creditors petition must be verified by an Affidavit (Form No. 11 or 12) Affidavit to be sworn by the creditor or someone having knowledge of the facts

CONTENTS OF VERIFYING AFFIDAVIT

Set out brief history of the debt Annex any available evidence Annex decree in the primary suit State that decree in primary suit has not been stayed Show outcome of execution of decree in primary suit State whether creditor is secured or not Identify the act of bankruptcy

SERVICE OF PETITION
Personal service Substituted service (Form No. 15) Affidavit of service ( Form No. 14) If debtor dies before the petition is served on him, service to effected on his personal representative or such other person as the court may prescribe.

PROCEEDING BEFORE HEARING OF PETITION

After a BP has been filed, either the creditor or the debtor may apply to the court for the appointment an interim receiver (S.10) Once made the order must be sent by the Registrar of the HC to the OR. An application for the appointment of an interim receiver and the order following thereon take Form No. 13. A person applying for the appointment of an interim receiver is required to deposit a certain amount with the official receiver to cover his expenses.

DEBTORS DEFENCE TO A PETITION

A debtor who intends to oppose a Petition to file a Notice of intention to oppose (Form No. 17) Notice specifies the statements in the Petition which are disputed Notice must be served at least 3 days before the day of hearing. If the debtor files a notice to oppose the petition and appears on the day of hearing, the court will first hear the question of validity of the creditors debt If debt invalid - debtor applies for dismissal of the petition If debt is valid - petition fixed for hearing

TIME OF HEARING OF PETITION

Where a petition is filed by the debtor, the court will make a RO immediately. Creditors petition can only be heard after the expiry of 8 days from its service unless the petition is based on the fact that the debtor filed a declaration of inability to pay his debts. Additionally, the court may in exceptional cases hear a creditors petition before the expiry of 8 days after service where for example the debtor has absconded.

PROCEDURE AT HEARING OF PETITION Non appearance: Of creditor - Petition lapses Of Debtor RO made All petitions once filed can only withdrawn with the leave of Court (see ss. 8(2) and 7(7) of bankruptcy Act respectively).

WHAT CREDITOR MUST PROVE AT HEARING

At the hearing of the petition, the petitioner must prove the following matters: Proof of the debt That the petition was served; The act of bankruptcy: (s.7 (2) and (3)

DEBTORS POSSIBLE DEFENCES

Payment

Existence of an appeal or an application to set aside the decree in the primary suit and that it has been stayed.

RECEIVING ORDER (RO)

RO automatic on the presentation of Debtors if the debtor has filed with the OR his statement of affairs. RO on a creditors petition only made after hearing of petition - court must be satisfied that a debtor has committed an act of bankruptcy. A RO on a debtors petition takes form 26 while that based on a creditors petition takes form 27.

CONTENTS OF A RO
Date on which the Petition made and filed Number of the Petition Description of the debtor name and address (as set out in the Petition) Notice of what is required of the Debtor to attend before the OR Endorsement showing name and address of Petitioner A RO made on a creditors petition must state the date of the act of bankruptcy on which it is made and contain a notice requiring the debtor to attend on the OR forthwith on service of the order at the place named in it.

TRANSMISSION SERVICE + ADVERTISEMENT OF RO

Registrar of HC to transmit RO to the OR (R 140) OR to serve it upon the debtor (R. 141). OR to advertise the RO in Gazette and in any of the local newspapers. The advertisements take form No. 29 and 30.

CONTENTS OF THE ADVERT OF A RO (S 13 BA)

Notice of a RO must specify the following:

Name of the debtor Its residential or business address Description of the debtor The date when the order was made The court which made the order The date of the petition

EFFECT OF A RO (S 9)
RO - OR becomes the receiver of the property of the debtor. Property + person of the debtor protected from execution of any form Rights of a secured creditor unaffected Special manager may be appointed in place of OR in special cases

CHALLENGE OF AN RO BY A DEBTOR
Apply for rescission Grounds: Debt repaid Notice of & days of application for rescission given to OR Upon service with application for rescission OR required to make and file four days before the appointed day for hearing of the application a report of the debtors conduct and affairs. Report prima facie evidence of the statements therein contained. Court also entitled to take into account other evidence including any objections creditors affected.

PROCEEDINGS CONSEQUENT ON THE MAKING OF A RO

These

involves the steps taken in bktcy before adjudication of the debtor Meeting of Creditors Proof of debts Public examination of Debtor Composition or Scheme of arrangement

MEETINGS OF CREDITORS (S14)

Meetings for considering whether a proposal for composition on scheme of arrangement should be accepted or whether it is expedient to have the debtor adjudged bankruptcy. To determine the best mode of dealing with the debtors property

STATEMENT OF AFFAIRS
A debtors statement of affairs is very crucial in the conduct of creditors meetings. A statement of affairs is a document which shows the following:

A debtors assets; His debts and liabilities; The names, residences and occupations of his creditors; and The securities held by his creditors and the dates when they were given

TIME FOR FILING STATEMENT OF AFFAIRS

In the case of a BP by a debtor, the statement of affairs is required to be submitted to the OR at least 3 days before he presents his petition. In that event the OR is required to certify to the court that the statement has been submitted to him. In the case of a petition by a creditor, the statement of affairs is required to be submitted by the debtor to the OR within 14 days of the making of the RO. However, the OR may, for good reason, extend the time for the submission of this.

STATEMENT OF AFFAIRS
Any creditor is entitled to inspect the statement of affairs and to make a copy thereof. If a debtor in the case of a petition by a creditor, fails to file his statement of affairs within the prescribed time, he risks not only being adjudged bankrupt forthwith but may also incur penal consequences including being punished for contempt of court (s. 16(3) A statement of affairs must be verified by an affidavit

MAKING OF A STAEMENT OF AFFAIRS

RO furnishes the debtor with instructions to prepare his statement of affairs. The instructions are in a form (Form No. 31) which the debtor is required to fill out. It must be prepared in duplicate. Once the debtor submits his statement of affairs to the OR that it is the responsibility of the OR to file it in court.

FIRST MEETING OF CREDITORS

Summoned by OR by giving a notice of at least 6 days in the Kenya Gazette. Summoned within 60 days of the court making the RO. Notice calling for meeting must be accompanied with a summary of the debtors statement of affairs. Notice must indicate the time and place of the meeting. Other meetings may be called subsequently as is deemed necessary.

CHAIR OF CREDITORS MEETINGS

OR acts as the chairman of the 1st meeting. Subsequent meeting, the person to be designated chairman is the person appointed by resolution of that meeting.

CONDUCT OF CREDITORS MEETINGS

Only creditors who have proved their debts by filing their proofs of debt can vote at such meetings. A creditor may vote either in person or by proxy. Where one wants to vote by proxy, he must complete and return to the OR the requisite proxy form.

VOTING BY PROXY

There are two types of proxies:

The first is called a general proxy. A general proxy allows the proxy to do all things in the proceedings on behalf of the creditor. A general proxy is in Form No. 59, The second form of proxy is called a special proxy. A special proxy only entitles the proxy to deal with issues specified in it. A special proxy takes form No. 60.

QUORUM OF CREDITORS MEETINGS

The quorum of any meeting of creditors is a minimum of 3 unless their number is less than that. In the latter case, the quorum can only be constituted if all the creditors are present. A meeting will be called off if no quorum is established after half an hour from the time appointed for it. In that case it is to be adjourned and can be recalled after 3 days but in any event, it must be recalled within 21 days of its adjournment.

MINUTES

It is mandatory to record the minutes of such meetings

PROOF OF DEBTS

All creditors must take steps to prove their debts as soon as is practicable after the RO has been made. This is done by delivering or sending by post the OR or trustee (where one has been appointed) an affidavit verifying the debt. The affidavit may be sworn by the creditor himself or by some person authorized to do so on his behalf. The verify affidavit must fulfill the following. It should contain or refer to a statement of account showing the particulars of the debt Specify any vouchers by which the statement can substantiated. Where vouchers are specified, a creditor should always be ready to produce them if required to do so by the OR or trustee;

PROOF OF DEBTS cont

It

should specify whether the creditor is secured or not. If a secured creditor fails to, disclose his security he risks forfeiting it altogether. Proofs of debts are available for examination by all creditors.

PROOFS BY SECURED CREDITORS

A secured creditor who has realized his security can only prove for the balance. A secured creditor who wishes to prove the whole of his debt in the bankruptcy, he must surrender his security to the OR or trustee.

PROOFS BY SECURED CREDITORS contd

A secured creditor has not realized nor surrendered his security he shall before ranking for dividend, state in his proof the particulars of his security, the date when it was given and the value which he assesses it. Consequently he can only receive a dividend which is the balance due to him after deducting the value assessed for the security. A trustee may choose to redeem any assessed security

ADMISSION OF DEBTS
It is the duty at the trustee or OR to admit or reject proofs of debt. What he does is to examine it and the grounds on which it is made. If there is no sufficient evidence he may reject it. His decision may be appealed from by applying to court for review.

PUBLIC EXAMINATION (PE)

Once a RO has been made, the OR is required to apply to the court to fix a day for holding PE of the debtor. This is done after the debtor has submitted to the OR his statement of affairs. The purpose of PE is to see into the debtors conduct, dealings and property.

WHO PARTICIPATES A PE?

All creditors who have filed their proof of debt arte entitled to Qn. the debtor concerning his affairs and the causes of his failure. The OR or trustee can also take part in the exercise. The court can also question the debtor. Debtor's Advocate allowed to be present at PE but he is not entitled to put any questions to the debtor nor to address the court.

FORMAT OF A PE

The PE takes the following format:

The debtor is examined under oath. Notes of the examination are taken down in writing and at the end of it all, the debtor is expected to sign them.

SERVICE AND NOTICE OF THE PE

It is the duty of the OR to serve the order for PE on the debtor and also give notice of the same to the creditors. The OR is also required to publish the order for PE in the Kenya Gazette and in any of the local newspapers.

FAILURE TO ATTEND A PE
A

debtor who fails to attend at the PE is liable to be arrested.

OTHER FORMAT OF PE
The court may dispense with PE where the debtor is a lunatic or suffers from a mental or physical affliction or disability which renders him unfit to attend the PE. Alternately, the court may direct that the debtor be examined in some manner or some place other than the usual one.

COMPOSITION OR SCHEME OF ARRANGEMENT

Once a RO has been made and the debtor intends to make a proposal for a composition in satisfaction of his debts or a proposal for a scheme of arrangement of his affairs he is required to lodge with the OR a written proposal setting out the terms of his composition or scheme to be considered by his creditors. Composition or scheme required to be lodged within 4 days of the submission of the statement of affairs or such other longer period as the OR may direct. The debtor must sign the composition or scheme and set out in it particulars of any sureties or securities he wishes to give. A proposal for a composition is in Form 74. A proposal for a scheme is in form 75.

EFFECT OF A COMPOSITION OR SCHEME

Where a debtor has filed a proposal, the OR is required to hold a meeting of creditors before the conclusion of the PE so that they can decide whether or not the proposal is acceptable. Once the OR receives the proposal he is required to prepare a report on it together with a voting letter. The ORs Report and voting letter is in form No. 76.

ORs REPORT ON PROPOSAL

To enable the creditors make an informed decision at their meeting called to consider any proposal, the OR is expected to send to all creditors a copy of the debtors proposal and the report of the OR on it.

VOTING ON PROPOSAL

At their meeting the creditors are expected to take a vote on the proposal and if a majority of them whose value is of all creditors who have proved their debts resolve to accept the proposal, it shall be deemed as accepted by all the creditors and when approved by the court it shall be binding on all of them. For purposes of deciding the question of whether or not to accept, it is not mandatory that the creditors attend the meeting called for that purpose. It suffices if they show their inclination by either assenting or dissenting to the voting letter which forms part of the ORs Report on the proposal (Form No.76) and returning it to the OR at least a day before the day scheduled for the meeting.

APPROVAL OF PROPOSAL BY COURT

Once a proposal is accepted, the OR or the debtor can after the PE of the debtor apply to the court to have the proposal approved. Notice of the hearing of such an application must be given to all concerned parties. The report of the OR on the proposal must be filed in court at least 4 days before the day fixed for hearing of the application for approval. The court may either approve the proposal or reject it and its decision must be gazetted by the registrar of the High Court. Any creditor can oppose the application for approval of any proposal even if he voted in its support at the meeting of creditors. In deciding whether or not to approve a proposal, the court will consider such objections as well as the report of the OR.

CONSEQUENCES WHERE PROPOSAL APPROVED

Once proposal approved by the court the OR is expected, after paying all relevant costs and expenses incidental to the proceedings to put the debtor back into possession of his property. Alternatively the debtor may appoint a trustee or his agent in the proposal to take possession of his property. The concomitant consequence is that the RO will also be discharged. A composition or scheme duly approved operates as a contract between the debtor and his creditors and any party who has an interest in it may apply to the court to enforce it. If a debtor defaults on the proposal approved by the court he risks being adjudged bankrupt and the composition or scheme being annulled. In that case, the debtors property shall once again automatically vest in the OR.

ADJUDICATION OF BANKRUPTCY

A debtor can only be adjudged bankrupt after the RO has been made. One will be adjudged bankrupt in the following cases:
When the debtor applies to be adjudged bankrupt. The debtor may make such an application at the time of making a RO or at any time thereafter. This kind of application need not be done after notice and may even be made orally (R. 180) When creditors do not attend the 1st meeting of creditors or the subsequent meetings (no quorum is attained).

ADJUDICATION OF BANKRUPTCY contd

Or where the debtor absconds, Or where the debtor does not make any proposal (R. 181). In that event, the OR or any creditor may apply to the court to have the debtor adjudged bankrupt. Where the creditors refuse to accept a composition or scheme made by the debtor at their meeting of creditors. In that case, the OR or any interested party may apply to the court for the debtor to be adjudged bankrupt. (R. 182) Where the PE of the debtor has been adjourned sine die (indefinitely). In that case, the court may adjudge the debtor bankrupt even without notifying him. (R. 183). A PE may be adjourned sine die in the following cases:

Where the debtor fails to disclose his affairs; Where the debtor fails to attend the PE; Where the debtor fails to comply with any order of the court in relation to his accounts, conduct, dealings and property. (refer 155)

ADJUDICATION OF BANKRUPTCY contd

Where the creditors resolve at their meeting to have the debtor declared bankrupt or they fail to pass any resolution (see 20). Resolution in form No. 43 If a composition or scheme is not approved within 14 after the conclusion of the PE of the debtor. (see 20) If the debtor with the concurrence of the OR consents in writing to be adjudged bankrupt (see 20).

EFFECT OF ADJUDICATION
Upon adjudication of bankruptcy, the property of the debtor becomes divisible among his creditors and shall vest in the trustee in bankruptcy (TIB). The order adjudging one bankrupt is required to specify the period at the expiration of which the debtor may apply to be discharged from the bankruptcy. The order of adjudication is in form No. 96

NOTICE OF ADJUDICATION
Notice

of adjudication of bankruptcy is also required to be published in the Kenya gazette and a local newspaper by the OR.

TIB
TIB appointed by the creditors by an ordinary resolution or by the committee of inspection. TIB required to give security before the court certifies his appointment. Appointment of TIB takes effect from the date of such certificate.

COMMITTEE OF INSPECTION (CI)

The trustee is supervised by a CI which is a body appointed by the creditors meeting. CI consists not more than 5 but not less than 3 persons who must be either creditors or their agents. CI must meet at least once a month.

PROPOSAL AFTER ADJUDICATION

Even after adjudication the creditors may resolve to accept a proposal for composition or scheme. If the court approves the composition or scheme, it may annul the bankruptcy and vest the property once again in the debtor. A debtor who fails to meet his obligations under a composition or scheme will once again be declared bankrupt.

DISCHARGE
At the expiration of the time prescribed by the court in the AO, the bankrupt is required to apply to the court for his discharge. The court shall fix the date for the hearing of such an application but such date must be after the PE has been concluded. (see 29)

CONDITIONS FOR DISCHARGE

In order to apply for his discharge, a debtor is required to produce to the registrar of the High Court a certificate from the OR specifying the number of creditors of whom the OR has notice.

NOTICE OF APPLICATION FOR DISCHARGE

Once the day for hearing of the application from discharge is given, the registrar of High Court is required to give notice thereof to the OR and trustee. The notice must be at least 28 before the day of hearing. The registrar is also required to advertise the notice of the hearing in the Kenya Gazette at least 14 days before the day of the hearing. The OR is required to notify the creditors of the day of the hearing of the application for discharge 14 days before the appointed day.

HEARING OF APPLICATION FOR DISCHARGE

The OR is also expected to file in court his report of the debtors conduct and affairs 7 days before the day of hearing. If a creditor wishes to oppose the discharge of a debtor, he is required to file a notice of objection stating the grounds on which he opposes the discharge and serve if on the OR and debtor at least two days before the day of hearing (refer 189 (2) )

CONDITIONAL DISCHARGE

In dealing with an application for discharge, the court may make the order of discharge but impose certain conditions on the debtor. Example:
The court in a case where there is a balance of the debts provable in bankruptcy at the time of discharge the court will only grant a discharge if the debtor gives consent for judgment to be entered against him by the OR or trustee for the balance. The form of such conditional discharge is in form 108. The court may also grant conditional discharge requiring the debtor to surrender a portion of his future earnings or after acquired property and income to the OR or trustee for distribution to his creditors. An order of this latter conditional discharge is in form No. 107.

NOTICE OF ORDER OF DISCHARGE

An order for discharge must be gazetted. However, gazettement can only be done after the time for appeal against it has elapsed or after the decision of the CA thereon

DISTRIBUTION OF THE DEBTORS PROPERTY

Once a debtor is adjudged bankrupt his property vests in TIB and is to be divided amongst his creditors. However, there are rules which govern the order of precedence of the debts. (see S. 38 BA)

PAYMENT OF PREFERENTIAL DEBTS

The order of priority is as follows:

The above debts rank equally between themselves and must be paid in full unless the property of the bankrupt is insufficient to meet them in which case they shall abate in equal proportions.

Taxes due to the Government and any rates. This only relate to those taxes and rates accrued within 1 year before the RO was made. Any rents due to the government for the last 5 years. Wages or salaries of the bankrupts employees. This can only be claimed for a maximum of 4 months before making of the RO. Compensation due to any of the bankrupts workmen Amounts required to be paid by the bankrupt to the NSSF for 12 months before the making of the RO for the bankrupts employees.

PAYMENT OF GENERAL DEBTS

After payment of the preferential claims the balance of the debtors property will be utilized to discharge the other debts provable in bankruptcy. All such debts are required to be paid in pari passu. If there is any surplus after payment of those debts, it is applied to pay any interest from the date of the RO.

PROPERTY SUBJECT TO DISTRIBUTION

It is only the bankrupts property which can be divided amongst his creditors. Property held by the bankrupt on trust for any person cannot be divided amongst his creditors. The law also excludes to a certain value a debtors tools of trade and necessary wearing apparel and bedding for himself and immediate family. All other property belonging to or which is vested in the debtor at the commencement of bankruptcy or which is acquired or devolve on him before discharge will be subject for distribution amongst his creditors.

DIVIDENTS

The trustee is expected, after retaining such sums necessary to cover the costs of administration, to declare and distribute dividends amongst the creditors who have proved their debts. Before a trustee declares a dividend, he is required to give a notice of 2 months of his intention to do so to creditors mentioned in the bankrupts statement of affairs but who have not yet proved their debts. Such notice must specify the latest date by which all proofs must be lodged. The notice must be gazetted.

DEBTS TO BE PROVIDED FOR

All debts which have been admitted by the OR must be provided for. As concerns debts which have been rejected the following provisions will apply. When a creditor has appealed against the ORs decision to reject his proof, that creditors debt must be provided for until the appeal is concluded. If the creditor succeeds in the appeal, he will be entitled to be paid a dividend as may be found to be due. If he fails, there will be no dividend to be paid to him. On the other hand, if a creditor has his debt rejected and he does not appeal against that decision, his debt will not be provided for in the process of declaring dividends.

SURPLUS

The bankrupt is entitled to receive any surplus which remains after payment in full of his creditors.

BANKRUPTCY OFFICERS
OFFICIAL RECEIVER (OR) TRUSTEE IN BANKRUPTCY (TIB) SPECIAL MANAGER

OFFICIAL RECEIVER
Appointed by the AG. Basically state counsel Assisted by officers called Deputy Official Receivers

DUTIES OF OR (SS 76 and 77)

Investigate the conduct of the debtor and report to the court. This will extend to establishing whether the debtor has committed any act which is an offence under the BA or which would justify the court in refusing, suspending or qualifying an order of a debtors discharge. To make other reports concerning the conduct of the debtor as the court may direct. Participate in the PE of the debtor To assist in the prosecution of fraudulent debtors. Pending the appointment of a trustee to act as interim receiver of the debtors estate and where a special manager is not appointed as manager thereof. To authorize the special manager to raise money or make advances for purposes of the estate in any case where, in the interest of the creditors, it appears necessary to do so. To summon and preside over the first management of creditors. To issue forms of proxy for use at the meetings of creditors; To report to the creditors as to any proposal which the debtor may have made with respect to the mode of liquidating his affairs. To advertise the RO, the date of the first meeting of creditors and the debtors PE and such other matters as it may be it may be necessary to advertise. To act as trustee during any vacancy in the office of trustee To furnish the debtor with instructions for the preparation of his statement of affairs Admitting proofs of debts.

TRUSTEE IN BANKRUPTCY (TIB)

Appointed by the creditors or committee of inspection. The creditors may appoint more than one person to be TIB

DUTIES OF TIB

Hold property of the debtor Make contracts on behalf of the debtor; Sue and be sued on behalf of the debtor Admission of proofs of debts Declare dividends Distribute the debtors property amongst his creditors.

SPECIAL MANAGER
Appointed by creditors to manager estate of a debtor in complex situations Is essentially answerable to OR and must always seek the authority of OR he takes any major decision in respect of the estate.