Receivership

The matter that dominated the discussions in this meeting was receivership. The context was the personal liability of receivers. The committee agreed that receivers should remain personally liable to creditors, and then discussed whether they could contract themselves out of such liability. For the committee, the answer to this question depended on the type of creditor and debtor in a particular case. It was agreed that receivers should be able to contract out on an individual basis, but not on a collective basis.

The committee also reviewed the relationship between receivers and the banks. it concluded that if receivers’duties were extended to all parties, then there would be no need for the bank to indemnify receivers.

The committee reviewed the situation of a technically insolvent company that was still operating via government subventions.

Winding up regimes

The second matter was the existing procedure of winding up companies. A number of observations were made, the most important of which was that there was no point in putting company winding up and individual insolvency under one regime. On this basis, the committee then concluded that there should be three systems of winding up one for individuals one for companies and one applying generally.

Meeting 3 - 28-4-77