The meeting draws attention to the fact that a statement by the Institute of Chartered Accountants included a provision prohibiting partners and employees of a practice from becoming liquidators of an insolvent company if a partner or employee of that practice had been a receiver of the assets of that company within the previous two years. Th committee noted that the Institute should be informed that such a clause would make the Committee’s work more difficult.

The applicability of the Trust Property Concept

In terms of trust property, Mr Muir Hunter noted noted that the concept is being attached to insurance broking and estate agents. The committee concludes that while it is impossible to avoid some trust moneys, the Committee should not say what should or should not be included. The concept of a trust, particularly when the estate is evolved, should be left to the Court to decide in each case.

Personal Earnings

The committee emphasised that personal earnings should be tough to get to using the insolvency procedure. Yet the questions that needed to be determined include how much a bankrupt should be allowed to keep , and whether a husband who withdrew sums of his wife’s company should be allowed to keep those sum. The Chairman suggested that a debt be created against the bankrupt, which he/she has to pay from their future personal income.

The Matrimonial Home

The committee seems to agree that while the protection of the matrimonial home was crucial, it should, nevertheless, not be immune from bankruptcy procedures. The committee discussed the differences in treatment of the matrimonial home if it was registered in the name of the wife or husband. The committee raised the possibility of dishonest debtors putting the home away from the reach of creditors by registering it in their spouse’s name.

After acquired property

The main issue with acquired property is fairness. Some members were in favour of abolishing the provisions which vested an after-acquired property in the trustee in bankruptcy rather than the bankrupt, yet other members thought that this could lead to assets escaping the bankruptcy procedures.

 

On page 11, you will find an extract dealing with the Bankruptcy Act 1914, s.38, regarding the rights and responsibilities of a trustee in bankruptcy.

Meeting31 - 13th June 1979