The Insolvency Rules 1986

• (2) If the certificate is not so included, the court shall forthwith send copies of it to the official receiver and the bankrupt.

Duty of official receiver in summary administration

6.49

• (1) Where a trustee has been appointed, the official receiver shall send a copy of the certificate of summary administration (whether or not included in the bankruptcy order) to him.

• (2) Within 12 weeks after the issue of the certificate the official receiver shall (insofar as he has not already done so) give notice to creditors of the making of the bankruptcy order.

Revocation of certificate of summary administration

6.50

• (1) The court may under section 275(3) revoke a certificate for summary administration, either of its own motion or on the application of the official receiver.

• (2) If the official receiver applies for the certificate to be revoked, he shall give at least 14 days' notice of the application to the bankrupt.

• (3) If the court revokes the certificate, it shall forthwith give notice to the official receiver and the bankrupt.

• (4) If at the time of revocation there is a trustee other than the official receiver, the official receiver shall send a copy of the court's notice to him.

CHAPTER 4 — THE INTERIM RECEIVER

Application for appointment of interim receiver

6.51

• (1) An application to the court for the appointment of an interim receiver under section 286 may be made by a creditor or by the debtor, or by an insolvency practitioner appointed under section 273(2).

• (2) The application must be supported by an affidavit stating—

• (a) the grounds on which it is proposed that the interim receiver should be appointed,

• (b) whether or not the official receiver has been informed of the application and, if so, has been furnished with a copy of it,

• (c) whether to the applicant's knowledge there has been proposed or is in force a voluntary arrangement under Part VIII of the Act, and

• (d) the applicant's estimate of the value of the property or business in respect of which the interim receiver is to be appointed.

• (3) If an insolvency practitioner has been appointed under section 273, and it is proposed that he (and not the official receiver) should be appointed interim receiver, and it is not the insolvency practitioner himself who is the applicant under this Rule, the affidavit under paragraph (2) must state that he has consented to act.

• (4) The applicant shall send copies of the application and the affidavit to the person proposed to be appointed interim receiver. If that person is the official receiver and an insolvency practitioner has been appointed under section 273 (and he is not himself the applicant), copies of the application and affidavit shall be sent by the applicant to the insolvency practitioner.

If, in any case where a copy of the application is to be sent to a person under this paragraph, it is for any reason not practicable to send a copy, that person must be informed of the application in sufficient time to enable him to be present at the hearing.

• (5) The official receiver and (if appointed) the insolvency practitioner may attend the hearing of the application and make representations.

• (6) The court may on the application, if satisfied that sufficient grounds are shown for the appointment, make it on such terms as it thinks fit.

Order of appointment

6.52

• (1) The order appointing the interim receiver shall state the nature and a short description of the property of which the person appointed is to take possession, and the duties to be performed by him in relation to the debtor's affairs.

• (2) The court shall, forthwith after the order is made, send 2 sealed copies of it to the person appointed interim receiver (one of which shall be sent by him forthwith to the debtor).

Deposit

6.53

• (1) Before an order appointing the official receiver as interim receiver is issued, the applicant for it shall deposit with him, or otherwise secure to his satisfaction, such sum as the court directs to cover his remuneration and expenses.

• (2) If the sum deposited or secured subsequently proves to be insufficient, the court may, on application by the official receiver, order that an additional sum be deposited or secured. If the order is not complied with within 2 days after service on the person to whom the order is directed, the court may discharge the order appointing the interim receiver.

• (3) If a bankruptcy order is made after an interim receiver has been appointed, any money deposited under this Rule shall (unless it is required by reason of insufficiency of assets for payment of remuneration and expenses of the interim receiver, or the deposit was made by the debtor out of his own property) be repaid to the person depositing it (or as that person may direct) out of the bankrupt's estate, in the prescribed order of priority.

Security

6.54

• (1) The following applies where an insolvency practitioner is appointed to be interim receiver under section 286(2).

• (2) The cost of providing the security required under the Act shall be paid in the first instance by the interim receiver; but—

• (a) if a bankruptcy order is not made, the person so appointed is entitled to be reimbursed out of the property of the debtor, and the court may make an order on the debtor accordingly, and

• (b) if a bankruptcy order is made, he is entitled to be reimbursed out of the estate in the prescribed order of priority.

Failure to give or keep up security

6.55

• (1) If the interim receiver fails to give or keep up his security, the court may remove him, and make such order as it thinks fit as to costs.

• (2) If an order is made under this Rule removing the interim receiver, or discharging the order appointing him, the court shall give directions as to whether any, and if so what, steps should be taken for the appointment of another person in his place.

Remuneration

6.56

• (1) The remuneration of the interim receiver (other than the official receiver) shall be fixed by the court from time to time on his application.

• (2) In fixing the interim receiver's remuneration, the court shall take into account—

• (a) the time properly given by him (as interim receiver) and his staff in attending to the debtor's affairs,

• (b) the complexity (or otherwise) of the case,

• (c) any respects in which, in connection with the debtor's affairs, there falls on the interim receiver any responsibility of an exceptional kind or degree,

• (d) the effectiveness with which the interim receiver appears to be carrying out, or to have carried out, his duties as such, and

• (e) the value and nature of the property with which he has to deal.

• (3) Without prejudice to any order the court may make as to costs, the interim receiver’s remuneration (whether the official receiver or another) shall be paid to him, and the amount of any expenses incurred by him (including the remuneration and expenses of any special manager appointed under section 370) reimbursed—

• (a) if a bankruptcy order is not made, out of the property of the debtor, and

• (b) if a bankruptcy order is made, out of the estate in the prescribed order of priority,

or, in either case (the relevant funds being insufficient), out of the deposit under Rule 6.53.

• (4) Unless the court otherwise directs, in a case falling within paragraph (3)(a) above the interim receiver may retain out of the debtor’s property such sums or property as are or may be required for meeting his remuneration and expenses.

Termination of appointment

6.57

• (1) The appointment of the interim receiver may be terminated by the court on his application, or on that of the official receiver, the debtor or any creditor.

• (2) If the interim receiver's appointment terminates, in consequence of the dismissal of the bankruptcy petition or otherwise, the court may give such directions as it thinks fit with respect to the accounts of his administration and any other matters which it thinks appropriate.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER 5 — DISCLOSURE BY BANKRUPT WITH RESPECT TO THE STATE OF HIS AFFAIRS

SECTION A: CREDITOR'S PETITION

Preliminary

6.58

The Rules in this Section apply with respect to the statement of affairs required by section 288(1) to be submitted by the bankrupt, following a bankruptcy order made on a creditor's petition, and the further and other disclosure which is required of him in that case.

The statement of affairs

6.59

The bankrupt's statement of affairs shall be in Form 6.33, and contain all the particulars required by that form.

Verification and filing

6.60

• (1) The bankrupt shall be furnished by the official receiver with instructions for the preparation of his statement of affairs, and the forms required for that purpose.

• (2) The statement of affairs shall be verified by affidavit and delivered to the official receiver, together with one copy.

• (3) The official receiver shall file the verified statement in court.

• (4) The affidavit may be sworn before an official receiver or a deputy official receiver, or before an officer of the Department or the court duly authorised in that behalf.

Limited disclosure

6.61

• (1) Where the official receiver thinks that it would prejudice the conduct of the bankruptcy for the whole or part of the statement of affairs to be disclosed, he may apply to the court for an order of limited disclosure in respect of the statement, or any specified part of it.

• (2) The court may on the application order that the statement or, as the case may be, the specified part of it be not filed in court, or that it is to be filed separately and not be open to inspection otherwise than with leave of the court.

Release from duty to submit statement of affairs; extension of time

6.62

• (1) The power of the official receiver under section 288(3) to release the bankrupt from his duty to submit a statement of affairs, or to grant an extension of time, may be exercised at the official receiver's own discretion, or at the bankrupt's request.

• (2) The bankrupt may, if he request a release or extension of time and it is refused by the official receiver, apply to the court for it.

• (3) The court may, if it thinks that no sufficient cause is shown for the application, dismiss it; but it shall not do so unless the bankrupt has had an opportunity to attend the court for an ex parte hearing, of which he has been given at least 7 days' notice.

If the application is not dismissed under this paragraph, the court shall fix a venue for it to be heard, and give notice to the bankrupt accordingly.

• (4) The bankrupt shall, at least 14 days before the hearing, send to the official receiver a notice stating the venue and accompanied by a copy of the application, and of any evidence which he (the bankrupt) intends to adduce in support of it.

• (5) The official receiver may appear and be heard on the application; and, whether or not he appears, he may file a written report of any matters which he considers ought to be drawn to the court's attention.

If such a report is filed, a copy of it shall be sent by the official receiver to the bankrupt, not later than 5 days before the hearing.

• (6) Sealed copies of any order made on the application shall be sent by the court to the bankrupt and the official receiver.

• (7) On any application under this Rule the bankrupt's costs shall be paid in any event by him and, unless the court otherwise orders, no allowance towards them shall be made out of the estate.

Expenses of statement of affairs

6.63

• (1) If the bankrupt cannot himself prepare a proper statement of affairs, the official receiver may, at the expense of the estate, employ some person or persons to assist in the preparation of the statement.

• (2) At the request of the bankrupt, made on the grounds that he cannot himself prepare a proper statement, the official receiver may authorise an allowance payable out of the estate (in accordance with the prescribed order of priority) towards expenses to be incurred by the bankrupt in employing some person or persons to assist him in preparing it.

• (3) Any such request by the bankrupt shall be accompanied by an estimate of the expenses involved; and the official receiver shall only authorise the employment of a named person or a named firm, being in either case approved by him.

• (4) An authorisation given by the official receiver under this Rule shall be subject to such conditions (if any) as he thinks fit to impose with respect to the manner in which any person may obtain access to relevant books and papers.

• (5) Nothing in this Rule relieves the bankrupt from any obligation with respect to the preparation, verification and submission of his statement of affairs, or to the provision of information to the official receiver or the trustee.

Requirement to submit accounts

6.64

• (1) The bankrupt shall, at the request of the official receiver, furnish him with accounts relating to his affairs of such nature, as at such date and for such period as he may specify.

• (2) The period specified may begin from a date up to 3 years preceding the date of the presentation of the bankruptcy petition.

• (3) The court may, on the official receiver's application, require accounts in respect of any earlier period.

• (4) Rule 6.63 applies (with the necessary modifications) in relation to accounts to be furnished under this Rule as it applies in relation to the statement of affairs.

Submission and filing of accounts

6.65

• (1) The accounts to be furnished under Rule 6.64 shall, if the official receiver so requires, be verified by affidavit, and (whether or not so verified) delivered to him within 21 days of the request under Rule 6.64(1), or such longer period as he may allow.

• (2) Two copies of the accounts and (where required) the affidavit shall be delivered by the bankrupt to the official receiver, who shall file one copy in court (with the affidavit, if any).

Further disclosure

6.66

• (1) The official receiver may at any time require the bankrupt to submit (in writing) further information amplifying, modifying or explaining any matter contained in his statement of affairs, or in accounts submitted in pursuance of the Act or the Rules.

• (2) The information shall, if the official receiver so directs, be verified by affidavit, and (whether or not so verified) delivered to him within 21 days of the requirement under this Rule, or such longer period as he may allow.

• (3) Two copies of the documents containing the information and (where verification is directed) the affidavit shall be delivered by the bankrupt to the official receiver, who shall file one copy in court (with the affidavit, if any).

SECTION B: DEBTOR'S PETITION

Preliminary

6.67

The Rules in this Section apply with respect to the statement of affairs required in the case of a person petitioning for a bankruptcy order to be made against him, and the further disclosure which is required of him in that case.

Contents of statement

6.68

The statement of affairs required by Rule 6.41 to accompany the debtor's petition shall be in Form 6.28, and contain all the particulars required by that form.

Requirement to submit accounts

6.69

• (1) The bankrupt shall, at the request of the official receiver, furnish him with accounts relating to his affairs of such nature, as at such date and for such period as he may specify.

• (2) The period specified may begin from a date up to 3 years preceding the date of the presentation of the bankruptcy petition.

• (3) The court may, on the official receiver's application, require accounts in respect of any earlier period.

Submission and filing of accounts

6.70

• (1) The accounts to be furnished under Rule 6.69 shall, if the official receiver so requires, be verified by affidavit, and (whether or not so verified) delivered to him within 21 days of the request under Rule 6.69, or such longer period as he may allow.

• (2) Two copies of the accounts and (where required) the affidavit shall be delivered by the bankrupt to the official receiver, who shall file one copy in court (with the affidavit, if any).

Expenses of preparing accounts

6.71

• (1) If the bankrupt cannot himself prepare proper accounts under Rule 6.69, the official receiver may, at the expense of the estate, employ some person or persons to assist in their preparation.

• (2) At the request of the bankrupt, made on the grounds that he cannot himself prepare the accounts, the official receiver may authorise an allowance payable out of the estate (in accordance with the prescribed order of priority) towards expenses to be incurred by the bankrupt in employing some person or persons to assist him in their preparation.

• (3) Any such request by the bankrupt shall be accompanied by an estimate of the expenses involved; and the official receiver shall only authorise the employment of a named person or a named firm, being in either case approved by him.

• (4) An authorisation given by the official receiver under this Rule shall be subject to such conditions (if any) as he thinks fit to impose with respect to the manner in which any person may obtain access to relevant books and papers.

• (5) Nothing in this Rule relieves the bankrupt from any obligation with respect to the preparation and submission of accounts, or to the provision of information to the official receiver or the trustee.

Further disclosure

6.72

• (1) The official receiver may at any time require the bankrupt to submit (in writing) further information amplifying, modifying or explaining any matter contained in his statement of affairs, or in accounts submitted in pursuance of the Act or the Rules.

• (2) The information shall, if the official receiver so directs, be verified by affidavit, and (whether or not so verified) delivered to him within 21 days from the date of the requirement under paragraph (1), or such longer period as he may allow.

• (3) Two copies of the documents containing the information and (where verification is directed) the affidavit shall be delivered by the bankrupt to the official receiver, who shall file one copy in court, with the affidavit (if any).

CHAPTER 6 — INFORMATION TO CREDITORS

General duty of official receiver

6.73

• (1) In accordance with this Chapter, the official receiver shall, at least once after the making of the bankruptcy order, send a report to creditors with respect to the bankruptcy proceedings, and the state of the bankrupt's affairs.

• (2) The official receiver shall file in court a copy of any report sent under this Chapter.

Those entitled to be informed

6.74

Any reference in this Chapter to creditors is to creditors of the bankrupt who are known to the official receiver or, where the bankrupt has submitted a statement of affairs, are identified in the statement.

Report where statement of affairs lodged

6.75

• (1) Where the bankrupt has submitted a statement of affairs, and it has been filed in court, the official receiver shall send out to creditors a report containing a summary of the statement (if he thinks fit, as amplified, modified or explained by virtue of Rule 6.66 or 6.72) and such observations (if any) as he thinks fit to make with respect to it or to the bankrupt's affairs generally.

• (2) The official receiver need not comply with paragraph (1) if he has previously reported to creditors with respect to the bankrupt's affairs (so far as known to him) and he is of opinion that there are no additional matters which ought to be brought to their attention.

Statement of affairs dispensed with

6.76

• (1) This Rule applies where the bankrupt has been released from the obligation to submit a statement of affairs.

• (2) As soon as may be after the release has been granted, the official receiver shall send to creditors a report containing a summary of the bankrupt's affairs (so far as within his knowledge), and his observations (if any) with respect to it or the bankrupt's affairs generally.

• (3) The official receiver need not comply with paragraph (2) if he has previously reported to creditors with respect to the bankrupt's affairs (so far as known to him) and he is of opinion that there are no additional matters which ought to be brought to their attention.

General rule as to reporting

6.77

• (1) The court may, on the official receiver's application, relieve him of any duty imposed on him by this Chapter of the Rules, or authorise him to carry out the duty in a way other than there required.

• (2) In considering whether to act as above, the court shall have regard to the cost of carrying out the duty, to the amount of the funds available in the estate, and to the extent of the interest of creditors or any particular class of them.

Bankruptcy order annulled

6.78

If the bankruptcy order is annulled, the duty of the official receiver to send reports under the preceding Rules in this Chapter ceases.

CHAPTER 7 — CREDITORS' MEETINGS

First meeting of creditors

6.79

• (1) If under section 293(1) the official receiver decides to summon a meeting of creditors, he shall fix a venue for the meeting; not more than 4 months from the date of the bankruptcy order.

• (2) When a venue has been fixed, notice of the meeting shall be given—

• (a) to the court, and

• (b) to every creditor of the bankrupt who is known to the official receiver or is identified in the bankrupt's statement of affairs.

• (3) Notice to the court shall be given forthwith; and the notice to creditors shall be given at least 21 days before the date fixed for the meeting.

• (4) The notice to creditors shall specify a time and date, not more than 4 days before the date fixed for the meeting, by which they must lodge proofs and (if applicable) proxies, in order to be entitled to vote at the meeting.

• (5) Notice of the meeting shall also be given by public advertisement.

• (6) Where the official receiver receives a request by a creditor under section 294 for a meeting of creditors to be summoned, and it appears to him that the request is properly made in accordance with the Act, he shall—

• (a) withdraw any notice already given by him under section 293(2) (that he has decided not to summon such a meeting), and

• (b) fix the venue of the meeting for not more than 3 months from his receipt of the creditor's request, and

• (c) act in accordance with paragraphs (2) to (5) above, as if he had decided under section 293(1) to summon the meeting.

• (7) A meeting summoned by the official receiver under section 293 or 294 is known as “the first meeting of creditors”.

Business at first meeting

6.80

• (1) At the first meeting of creditors, no resolutions shall be taken other than the following—

• (a) a resolution to appoint a named insolvency practitioner to be trustee in bankruptcy or two or more named insolvency practitioners as joint trustees;

• (b) a resolution to establish a creditors' committee;

• (c) (unless it has been resolved to establish a creditors' committee) a resolution specifying the terms on which the trustee is to be remunerated, or to defer consideration of that matter;

• (d) (if, and only if, two or more persons are appointed to act jointly as trustee) a resolution specifying whether acts are to be done by both or all of them, or by only one;

• (e) (where the meeting has been requisitioned under section 294) a resolution authorising payment out of the estate, as an expense of the bankruptcy, of the cost of summoning and holding the meeting;

• (f) a resolution to adjourn the meeting for not more than 3 weeks;

• (g) any other resolution which the chairman thinks it right to allow for special reasons.

• (2) No resolution shall be proposed which has for its object the appointment of the official receiver as trustee.

General power to call meetings

6.81

• (1) The official receiver or the trustee may at any time summon and conduct meetings of creditors for the purpose of ascertaining their wishes in all matters relating to the bankruptcy.

In relation to any meeting of creditors, the person summoning it is referred to as “the convener”.

• (2) When a venue for the meeting has been fixed, notice of the meeting shall be given by the convener to every creditor who is known to him or is identified in the bankrupt's statement of affairs.

The notice shall be given at least 21 days before the date fixed for the meeting.

• (3) The notice to creditors shall specify the purpose for which the meeting is summoned, and a time and date (not more than 4 days before the meeting) by which creditors must lodge proxies and those who have not already lodged proofs must do so, in order to be entitled to vote at the meeting.

• (4) Additional notice of the meeting may be given by public advertisement if the convener thinks fit, and shall be so given if the court so orders.

The chairman at a meeting

6.82

• (1) Where the convener of a meeting is the official receiver, he, or a person nominated by him, shall be chairman.

A nomination under this paragraph shall be in writing, unless the nominee is another official receiver or a deputy official receiver.

• (2) Where the convener is other than the official receiver, the chairman shall be he, or a person nominated by him in writing to act.

A person nominated under this paragraph must be either—

• (a) one who is qualified to act as an insolvency practitioner in relation to the bankrupt, or

• (b) an employee of the trustee or his firm who is experienced in insolvency matters.

Requisitioned meetings

6.83

• (1) A request by creditors to the official receiver for a meeting of creditors to be summoned shall be accompanied by—

• (a) a list of the creditors concurring with the request and the amount of their respective claims in the bankruptcy,

• (b) from each creditor concurring, written confirmation of his concurrence, and

• (c) a statement of the purpose of the proposed meeting.

Sub-paragraphs (a) and (b) do not apply if the requisitioning creditor's debt is alone sufficient, without the concurrence of other creditors.

• (2) The official receiver, if he considers the request to be properly made in accordance with the Act, shall—

• (a) fix a venue for the meeting, to take place not more than 35 days from the receipt of the request, and

• (b) give 21 days' notice of the meeting, and of the venue for it, to creditors.

• (3) Where a request for a creditors' meeting is made to the trustee, this Rule applies to him as it does to the official receiver.

Attendance at meeting of bankrupt, etc

6.84

• (1) Whenever a meeting of creditors is summoned, the convener shall give at least 21 days' notice of the meeting to the bankrupt.

• (2) If the meeting is adjourned, the chairman of the meeting shall (unless for any reason it appears to him to be unnecessary or impracticable) give notice of the fact to the bankrupt, if the latter was not himself present at the meeting.

• (3) The convener may, if he thinks fit, give notice to the bankrupt that he is required to be present, or in attendance.

• (4) In the case of any meeting, the bankrupt or any other person may, if he has given reasonable notice of his wish to be present, be admitted; but this is at the discretion of the chairman.

The chairman's decision is final as to what (if any) intervention may be made by the bankrupt, or by any other person admitted to the meeting under this paragraph.

• (5) If the bankrupt is not present, and it is desired to put questions to him, the chairman may adjourn the meeting with a view to obtaining his attendance.

• (6) Where the bankrupt is present at a creditors' meeting, only such questions may be put to him as the chairman may in his discretion allow.

Notice of meetings by advertisement only

6.85

• (1) In the case of any meeting to be held under the Act or the Rules, the court may order that notice of it be given by public advertisement, and not by individual notice to the persons concerned.

• (2) In considering whether to act under this Rule, the court shall have regard to the cost of public advertisement, to the amount of the funds available in the estate, and to the extent of the interest of creditors or any particular class of them.

Venue of meetings

6.86

• (1) In fixing the venue for a meeting of creditors, the person summoning the meeting shall have regard to the convenience of the creditors.

• (2) Meetings shall in all cases be summoned for commencement between the hours of 10.00 and 16.00 hours on a business day, unless the court otherwise directs.

• (3) With every notice summoning a creditors' meeting there shall be sent out forms of proxy.

Expenses of summoning meetings

6.87

• (1) Subject to paragraph (3) below, the expenses of summoning and holding a meeting of creditors at the instance of any person other, than the official receiver or the trustee shall be paid by that person, who shall deposit security for their payment with the trustee or, if no trustee has been appointed, with the official receiver.

• (2) The sum to be deposited shall be such as the trustee or (as the case may be) the official receiver determines to be appropriate; and neither shall act without the deposit having been made.

• (3) Where a meeting is so summoned, it may vote that the expenses of summoning and holding it shall be payable out of the estate, as an expense of the bankruptcy.

• (4) To the extent that any deposit made under this Rule is not required for the payment of expenses of summoning and holding the meeting, it shall be repaid to the person who made it.

Resolutions

6.88

• (1) Subject as follows, at a meeting of creditors, a resolution is passed when a majority (in value) of those present and voting, in person or by proxy, have voted in favour of the resolution.

• (2) In the case of a resolution for the appointment of a trustee—

• (a) if on any vote there are two nominees for appointment, the person who obtains the most support is appointed , provided that such support represents a majority in value of all those present (in person or by proxy) at the meeting and entitled to vote;

• (b) if there are three or more nominees, and one of them has a clear majority over both or all the others together, that one is appointed; and

• (c) in any other case the chairman shall continue to take votes (disregarding at each vote any nominee who has withdrawn and, if no nominee has withdrawn, the nominee who obtained the least support last time), until a clear majority is obtained for any one nominee.

• (3) The chairman may at any time put to the meeting a resolution for the joint appointment of any two or more nominees.

• (4) Where a resolution is proposed which affects a person in respect of his remuneration or conduct as trustee, or as proposed or former trustee, the vote of that person, and of any partner or employee of his, shall not be reckoned in the majority required for passing the resolution.

This paragraph applies with respect to a vote given by a person (whether personally or on his behalf by a proxy-holder) either as creditor or as proxy-holder for a creditor (but subject to Rule 8.6 in Part 8 of the Rules).

Chairman of meeting as proxy-holder

6.89

Where the chairman at a meeting holds a proxy for a creditor, which requires him to vote for a particular resolution, and no other person proposes that resolution—

• (a) he shall himself propose it, unless he considers that there is good reason for not doing so, and

• (b) if he does not propose it, he shall forthwith after the meeting notify his principal of the reason why not.

Suspension of meeting

6.90

Once only in the course of any meeting, the chairman may, in his discretion and without an adjournment, declare the meeting suspended for any period up to one hour.

Adjournment

6.91

• (1) The chairman at any meeting may, in his discretion, and shall if the meeting so resolves, adjourn it to such time and place as seems to him to be appropriate in the circumstances.

This is subject to Rule 6.129(3) in a case where the trustee or his nominee is chairman and a resolution has been proposed for the trustee's removal.

• (2) If within a period of 30 minutes from the time appointed for the commencement of a meeting a quorum is not present, then the chairman may, at his discretion, adjourn the meeting to such time and place as he may appoint.

• (3) An adjournment under this Rule shall not be for a period of more than 21 days; and Rule 6.86(1) and (2) applies with regard to the venue of the adjourned meeting.

• (4) If there is no person present to act as chairman, some other person present (being entitled to vote) may make the appointment under paragraph (2), with the agreement of others present (being persons so entitled).

Failing agreement, the adjournment shall be to the same time and place in the next following week or, if that is not a business day, to the business day immediately following.

• (5) Where a meeting is adjourned under this Rule, proofs and proxies may be used if lodged at any time up to midday on the business day immediately before the adjourned meeting.

Quorum

6.92

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Entitlement to vote

6.93

• (1) Subject as follows, at a meeting of creditors a person is entitled to vote as a creditor only if—

• (a) there has been duly lodged, by the time and date stated in the notice of the meeting, a proof of the debt claimed to be due to him from the bankrupt, and the claim has been admitted under Rule 6.94 for the purpose of entitlement to vote, and

• (b) there has been lodged, by that time and date, any proxy requisite for that entitlement.

• (2) The court may, in exceptional circumstances, by order declare the creditors, or any class of them, entitled to vote at creditors' meetings, without being required to prove their debts.

Where a creditor is so entitled, the court may, on the application of the trustee, make such consequential orders as it thinks fit (as for example an order treating a creditor as having proved his debt for the purpose of permitting payment of dividend).

• (3) A creditor shall not vote in respect of a debt for an unliquidated amount, or any debt whose value is not ascertained, except where the chairman agrees to put upon the debt an estimated minimum value for the purpose of entitlement to vote and admits his proof for that purpose.

• (4) A secured creditor is entitled to vote only in respect of the balance (if any) of his debt after deducting the value of his security as estimated by him.

• (5) A creditor shall not vote in respect of a debt on, or secured by, a current bill of exchange or promissory note, unless he is willing—

• (a) to treat the liability to him on the bill or note of every person who is liable on it antecedently to the bankrupt, and against whom a bankruptcy order has not been made (or, in the case of a company, which has not gone into liquidation), as a security in his hands, and

• (b) to estimate the value of the security and (for the purpose of entitlement to vote, but not for dividend) to deduct it from his proof.

Admission and rejection of proof

6.94

• (1) At any creditors' meeting the chairman has power to admit or reject a creditor's proof for the purpose of his entitlement to vote; and the power is exercisable with respect to the whole or any part of the proof.

• (2) The chairman's decision under this Rule, or in respect of any matter arising under Rule 6.93, is subject to appeal to the court by any creditor, or by the bankrupt.

• (3) If the chairman is in doubt whether a proof should be admitted or rejected, he shall mark it as objected to and allow the creditor to vote, subject to his vote being subsequently declared invalid if the objection to the proof is sustained.

• (4) If on an appeal the chairman's decision is reversed or varied, or a creditor's vote is declared invalid, the court may order that another meeting be summoned, or make such other order as it thinks just.

• (5) Neither the official receiver nor any person nominated by him to be chairman is personally liable for costs incurred by any person in respect of an application to the court under this Rule; and the chairman (if other than the official receiver or a person so nominated) is not so liable unless the court makes an order to that effect.

Record of proceedings

6.95

• (1) The chairman at any creditors' meeting shall cause minutes of the proceedings at the meeting, signed by him, to be retained by him as part of the records of the bankruptcy.

• (2) He shall also cause to be made up and kept a list of all the creditors who attended the meeting.

• (3) The minutes of the meeting shall include a record of every resolution passed; and it is the chairman's duty to see to it that particulars of all such resolutions, certified by him, are filed in court not more than 21 days after the date of the meeting.

CHAPTER 8 — PROOF OF BANKRUPTCY DEBTS

SECTION A: PROCEDURE FOR PROVING

Meaning of “prove”

6.96

• (1) A person claiming to be a creditor of the bankrupt and wishing to recover his debt in whole or in part must (subject to any order of the court under Rule 6.93(2)) submit his claim in writing to the official receiver, where acting as receiver and manager, or to the trustee.

• (2) The creditor is referred to as “proving” for his debt; and the document by which he seeks to establish his claim is his “proof”.

• (3) Subject to the next two paragraphs, the proof must be in the form known as “proof of debt” (whether the form prescribed by the Rules, or a substantially similar form), which shall be made out by or under the directions of the creditor, and signed by him or a person authorised in that behalf.

• (4) Where a debt is due to a Minister of the Crown or a Government Department, the proof need not be in that form, provided that there are shown all such particulars of the debt as are required in the form used by other creditors, and as are relevant in the circumstances.

• (5) Where an existing trustee proves in a later bankruptcy under section 335(5), the proof must be in FORM 6.38.

• (6) In certain circumstances, specified below in this Chapter, the proof must be in the form of an affidavit.

Supply of forms

6.97

• (1) Forms of proof shall be sent out by the official receiver or the trustee to every creditor of the bankrupt who is known to the sender, or is identified in the bankrupt's statement of affairs.

• (2) The forms shall accompany (whichever is first)—

• (a) the notice to creditors under section 293(2) (official receiver's decision not to call meeting of creditors), or

• (b) the first notice calling a meeting of creditors, or

• (c) where a certificate of summary administration has been issued by the court, the notice sent by the official receiver under Rule 6.49(2), or

• (d) where a trustee is appointed by the court, the notice of his appointment sent by him to creditors.

• (3) Where, with the leave of the court under section 297(7), the trustee advertises his appointment, he shall send proofs to the creditors within 4 months after the date of the bankruptcy order.

• (4) The above paragraphs of this Rule are subject to any order of the court dispensing with the requirement to send out forms of proof, or altering the time at which the forms are to be sent.

Contents of proof

6.98

• (1) Subject to Rule 6.96(4), the following matters shall be stated in a creditor's proof of debt—

• (a) the creditor's name and address;

• (b) the total amount of his claim as at the date of the bankruptcy order;

• (c) whether or not that amount includes outstanding uncapitalised interest;

• (d) whether or not the claim includes value added tax;

• (e) whether the whole or any part of the debt falls within any (and if so which) of the categories of preferential debts under section 386 of, and Schedule 6 to, the Act (as read with Schedule 3 to the Social Security Pensions Act 1975;

• (f) particulars of how and when the debt was incurred by the debtor;

• (g) particulars of any security held, the date when it was given and the value which the creditor puts upon it; and

• (h) the name, address and authority of the person signing the proof (if other than the creditor himself).

• (2) There shall be specified in the proof any documents by reference to which the debt can be substantiated; but (subject as follows) it is not essential that such documents be attached to the proof or submitted with it.

• (3) The trustee, or the convener or chairman of any meeting, may call for any document or other evidence to be produced to him, where he thinks it necessary for the purpose of substantiating the whole or any part of the claim made in the proof.

Claim established by affidavit

6.99

• (1) The trustee may, if he thinks it necessary, require a claim of debt to be verified by affidavit, for which purpose there shall be used the form known as “affidavit of debt”.

• (2) An affidavit may be required notwithstanding that a proof of debt has already been lodged.

• (3) The affidavit may be sworn before an official receiver or a deputy official receiver, or before an officer of the Department or of the court duly authorised in that behalf.

Cost of proving

6.100

• (1) Subject as follows, every creditor bears the cost of proving his own debt, including such as may be incurred in providing documents or evidence under Rule 6.98(3).

• (2) Costs incurred by the trustee in estimating the value of a bankruptcy debt under section 322(3) (debts not bearing a certain value) fall on the estate, as an expense of the bankruptcy.

• (3) Paragraphs (1) and (2) apply unless the court otherwise orders.

Trustee to allow inspection of proofs

6.101

The trustee shall, so long as proofs lodged with him are in his hands, allow them to be inspected, at all reasonable times on any business day, by any of the following persons—

• (a) any creditor who has submitted his proof of debt (unless his proof has been wholly rejected for purposes of dividend or otherwise),

• (b) the bankrupt, and

• (c) any person acting on behalf of either of the above.

Proof of licensed moneylender

6.102

A proof of debt in respect of a moneylending transaction made before 27th January 1980, where the creditor was at the time of the transaction a licensed moneylender, shall have endorsed on or annexed to it a statement setting out in detail the particulars mentioned in section 9(2) of the Moneylenders Act 1927.

Transmission of proofs to trustee

6.103

• (1) Where a trustee is appointed, the official receiver shall forthwith transmit to him all the proofs which he has so far received, together with an itemised list of them.

• (2) The trustee shall sign the list by way of receipt for the proofs, and return it to the official receiver.

• (3) From then on, all proofs of debt shall be sent to the trustee and retained by him.

Admission and rejection of proofs for dividend

6.104

• (1) A proof may be admitted for dividend either for the whole amount claimed by the creditor, or for part of that amount.

• (2) If the trustee rejects a proof in whole or in part, he shall prepare a written statement of his reasons for doing so, and send it forthwith to the creditor.

Appeal against decision on proof

6.105

• (1) If a creditor is dissatisfied with the trustee's decision with respect to his proof (including any decision on the question of preference), he may apply to the court for the decision to be reversed or varied.

The application must be made within 21 days of his receiving the statement sent under Rule 6.104(2).

• (2) The bankrupt or any other creditor may, if dissatisfied with the trustee's decision admitting or rejecting the whole or any part of a proof, make such an application within 21 days of becoming aware of the trustee's decision.

• (3) Where application is made to the court under this Rule, the court shall fix a venue for the application to be heard, notice of which shall be sent by the applicant to the creditor who lodged the proof in question (if it is not himself) and to the trustee.

• (4) The trustee shall, on receipt of the notice, file in court the relevant proof, together (if appropriate) with a copy of the statement sent under Rule 6.104(2).

• (5) After the application has been heard and determined, the proof shall, unless it has been wholly disallowed, be returned by the court to the trustee.

• (6) The official receiver is not personally liable for costs incurred by any person in respect of an application under this Rule; and the trustee (if other than the official receiver) is not so liable unless the court makes an order to that effect.

Withdrawal or variation of proof

6.106

A creditor's proof may at any time, by agreement between himself and the trustee, be withdrawn or varied as to the amount claimed.

Expunging of proof by the court

6.107

• (1) The court may expunge a proof or reduce the amount claimed—

• (a) on the trustee's application, where he thinks that the proof has been improperly admitted, or ought to be reduced; or

• (b) on the application of a creditor, if the trustee declines to interfere in the matter.

• (2) Where application is made to the court under this Rule, the court shall fix a venue for the application to be heard, notice of which shall be sent by the applicant—

• (a) in the case of an application by the trustee, to the creditor who made the proof; and

• (b) in the case of an application by a creditor, to the trustee and to the creditor who made the proof (if not himself).

SECTION B: QUANTIFICATION OF CLAIM

Negotiable instruments, etc

6.108

Unless the trustee allows, a proof in respect of money owed on a bill of exchange, promissory note, cheque or other negotiable instrument or security cannot be admitted unless there is produced the instrument or security itself or a copy of it, certified by the creditor or his authorised representative to be a true copy.

Secured creditors

6.109

• (1) If a secured creditor realises his security, he may prove for the balance of his debt, after deducting the amount realised.

• (2) If a secured creditor voluntarily surrenders his security for the general benefit of creditors, he may prove for his whole debt, as if it were unsecured.

Discounts

6.110

There shall in every case be deducted from the claim all trade and other discounts which would have been available to the bankrupt but for his bankruptcy, except any discount for immediate, early or cash settlement.

Debt in foreign currency

6.111

• (1) For the purpose of proving a debt incurred or payable in a currency other than sterling, the amount of the debt shall be converted into sterling at the official exchange rate prevailing on the date of the bankruptcy order.

• (2) “The official exchange rate” is the middle market rate at the Bank of England, as published for the date in question. In the absence of any such published rate, it is such rate as the court determines.

Payments of a periodical nature

6.112

• (1) In the case of rent and other payments of a periodical nature, the creditor may prove for any amounts due and unpaid up to the date of the bankruptcy order.

• (2) Where at that date any payment was accruing due, the creditor may prove for so much as would have fallen due at that date, if accruing from day to day.

Interest

6.113

• (1) In the following circumstances the creditor's claim may include interest on the debt for periods before the bankruptcy order, although not previously reserved or agreed.

• (2) If the debt is due by virtue of a written instrument and payable at a certain time, interest may be claimed for the period from that time to the date of the bankruptcy order.

• (3) If the debt is due otherwise, interest may only be claimed if, before the presentation of the bankruptcy petition, a demand for payment was made in writing by or on behalf of the creditor, and notice given that interest would be payable from the date of the demand to the date of payment and for all the purposes of the Act and the Rules shall be chargeable at a rate not exceeding that mentioned in paragraph (5).

• (4) Interest under paragraph (3) may only be claimed for the period from the date of the demand to that of the bankruptcy order.

• (5) The rate of interest to be claimed under paragraphs (2) and (3) is the rate specified in section 17 of the Judgments Act 1838 on the date of the bankruptcy order.

Debt payable at future time

6.114

A creditor may prove for a debt of which payment was not yet due at the date of the bankruptcy order, but subject to Rule 11.13 in Part 11 of the Rules (adjustment of dividend where payment made before time).

CHAPTER 9 — SECURED CREDITORS

Value of security

6.115

• (1) A secured creditor may, with the agreement of the trustee or the leave of the court, at any time alter the value which he has, in his proof of debt, put upon his security.

• (2) However, if a secured creditor—

• (a) being the petitioner, has in the petition put a value on his security, or

• (b) has voted in respect of the unsecured balance of his debt,

he may re-value his security only with leave of the court.

Surrender for non-disclosure

6.116

• (1) If a secured creditor omits to disclose his security in his proof of debt, he shall surrender his security for the general benefit of creditors, unless the court, on application by him, relieves him from the effect of this Rule on the ground that the omission was inadvertent or the result of honest mistake.

• (2) If the court grants that relief, it may require or allow the creditor's proof of debt to be amended, on such terms as may be just.

Redemption by trustee

6.117

• (1) The trustee may at any time give notice to a creditor whose debt is secured that he proposes, at the expiration of 28 days from the date of the notice, to redeem the security at the value put upon it in the creditor's proof.

• (2) The creditor then has 21 days (or such longer period as the trustee may allow) in which, if he so wishes, to exercise his right to re-value his security (with the leave of the court, where Rule 6.115(2) applies).

If the creditor re-values his security, the trustee may only redeem at the new value.

• (3) If the trustee redeems the security, the cost of transferring it is borne by the estate.

• (4) A secured creditor may at any time, by a notice in writing, call on the trustee to elect whether he will or will not exercise his power to redeem the security at the value then placed on it; and the trustee then has 6 months in which to exercise the power or determine not to exercise it.

Test of security's value

6.118

• (1) Subject as follows, the trustee, if he is dissatisfied with the value which a secured creditor puts on his security (whether in his proof or by way of re-valuation under Rule 6.117), may require any property comprised in the security to be offered for sale.

• (2) The terms of sale shall be such as may be agreed, or as the court may direct; and if the sale is by auction, the trustee on behalf of the estate, and the creditor on his own behalf, may appear and bid.

• (3) This Rule does not apply if the security has been re-valued and the re-valuation has been approved by the court.

Realisation of security by creditor

6.119

If a creditor who has valued his security subsequently realises it (whether or not at the instance of the trustee)—

• (a) the net amount realised shall be substituted for the value previously put by the creditor on the security, and

• (b) that amount shall be treated in all respects as an amended valuation made by him.

CHAPTER 10 — THE TRUSTEE IN BANKRUPTCY

SECTION A: APPOINTMENT AND ASSOCIATED FORMALITIES

Appointment by creditors' meeting

6.120

• (1) This Rule applies where a person has been appointed trustee by resolution of a creditors' meeting.

• (2) The chairman of the meeting shall certify the appointment, but not unless and until the person to be appointed has provided him with a written statement to the effect that he is an insolvency practitioner, duly qualified under the Act to act as trustee in relation to the bankrupt, and that he consents so to act.

• (3) The trustee’s appointment is effective from the date on which the appointment is certified, that date to be endorsed on the certificate.

• (4) The chairman of the meeting (if not himself the official receiver) shall send the certificate to the official receiver.

• (5) The official receiver shall in any case send the certificate to the trustee and file a copy of it in court.

Appointment by the court

6.121

• (1) This Rule applies where the court under section 297(3), (4) or (5) appoints the trustee.

• (2) The court's order shall not issue unless and until the person appointed has filed in court a statement to the effect that he is an insolvency practitioner, duly qualified under the Act to be the trustee, and that he consents so to act.

• (3) Thereafter, the court shall send 2 copies of the order to the official receiver. One of the copies shall be sealed, and this shall be sent by him to the person appointed as trustee.

• (4) The trustee's appointment takes effect from the date of the order.

Appointment by Secretary of State

6.122

• (1) This Rule applies where the official receiver—

• (a) under section 295 or 300, refers to the Secretary of State the need for an appointment of a trustee, or

• (b) under section 296, applies to the Secretary of State to make the appointment.

• (2) If the Secretary of State makes an appointment he shall send two copies of the certificate of appointment to the official receiver, who shall transmit one such copy to the person appointed, and file the other copy in court.

The certificate shall specify the date from which the trustee's appointment is to be effective.

Authentication of trustee's appointment

6.123

Where a trustee is appointed under any of the 3 preceding Rules, a sealed copy of the order of appointment or (as the case may be) a copy of the certificate of his appointment may in any proceedings be adduced as proof that he is duly authorised to exercise the powers and perform the duties of trustee of the bankrupt's estate.

Advertisement of appointment

6.124

• (1) Where the trustee is appointed by a creditors' meeting, he shall, forthwith after receiving his certificate of appointment, give notice of his appointment in such newspaper as he thinks most appropriate for ensuring that it comes to the notice of the bankrupt's creditors.

• (2) The expense of giving the notice shall be borne in the first instance by the trustee; but he is entitled to be reimbursed by the estate, as an expense of the bankruptcy.

The same applies also in the case of the notice or advertisement under section 296(4) (appointment of trustee by Secretary of State), and of the notice or advertisement under section 297(7) (appointment by the court).

Hand-over of estate to trustee

6.125

• (1) This Rule applies only where—

• (a) the bankrupt's estate vests in the trustee under Chapter IV of Part IX of the Act, following a period in which the official receiver is the receiver and manager of the estate according to section 287, or

• (b) the trustee is appointed in succession to the official receiver acting as trustee.

• (2) When the trustee's appointment takes effect, the official receiver shall forthwith do all that is required for putting him into possession of the estate.

• (3) On taking possession of the estate, the trustee shall discharge any balance due to the official receiver on account of—

• (a) expenses properly incurred by him and payable under the Act or the Rules, and

• (b) any advances made by him in respect of the estate, together with interest on such advances at the rate specified in section 17 of the Judgments Act 1838 on the date of the bankruptcy order.

• (4) Alternatively, the trustee may (before taking office) give to the official receiver a written undertaking to discharge any such balance out of the first realisation of assets.

• (5) The official receiver has a charge on the estate in respect of any sums due to him under paragraph (3). But, where the trustee has realised assets with a view to making those payments, the official receiver's charge does not extend in respect of sums deductible by the trustee from the proceeds of realisation, as being expenses properly incurred therein.

• (6) The trustee shall from time to time out of the realisation of assets discharge all guarantees properly given by the official receiver for the benefit of the estate, and shall pay all the official receiver's expenses.

• (7) The official receiver shall give to the trustee all such information, relating to the affairs of the bankrupt and the course of the bankruptcy, as he (the official receiver) considers to be reasonably required for the effective discharge by the trustee of his duties in relation to the estate.

• (8) The trustee shall also be furnished with any report of the official receiver under Chapter 6 of this Part of the Rules.

SECTION B: RESIGNATION AND REMOVAL; VACATION OF OFFICE

Creditors' meeting to receive trustee's resignation

6.126

• (1) Before resigning his office, the trustee must call a meeting of creditors for the purpose of receiving his resignation. Notice of the meeting shall be sent to the official receiver at the same time as it is sent to creditors.

• (2) The notice to creditors must be accompanied by an account of the trustee's administration of the bankrupt's estate, including—

• (a) a summary of his receipts and payments and

• (b) a statement by him that he has reconciled his account with that which is held by the Secretary of State in respect of the bankruptcy.

• (3) Subject as follows, the trustee may only proceed under this Rule on grounds of ill health or because—

• (a) he intends ceasing to be in practice as an insolvency practitioner, or

• (b) there is some conflict of interest or change of personal circumstances which precludes or makes impracticable the further discharge by him of the duties of trustee.

• (4) Where two or more persons are acting as trustee jointly, any one of them may proceed under this Rule (without prejudice to the continuation in office of the other or others) on the ground that, in his opinion and that of the other or others, it is no longer expedient that there should continue to be the present number of joint trustees.

• (5) If there is no quorum present at the meeting summoned to receive the trustee’s resignation, the meeting is deemed to have been held, a resolution is deemed to have been passed that the trustee’s resignation be accepted and the creditors are deemed not to have resolved against the trustee having his release.

• (6) Where paragraph (5) applies any reference in the Rules to a resolution that the trustee’s resignation be accepted is replaced by a reference to the making of a written statement, signed by the person who, had there been a quorum present, would have been chairman of the meeting, that no quorum was present and that the trustee may resign.

Action following acceptance of resignation

6.127

• (1) Where a meeting of creditors is summoned for the purpose of receiving the trustee's resignation, the notice summoning it shall indicate that this is the purpose, or one of the purposes, of the meeting; and the notice shall draw the attention of creditors to Rule 6.135 with respect to the trustee's release.

• (2) A copy of the notice shall at the same time also be sent to the official receiver.

• (3) Where the chairman of the meeting is other than the official receiver, and there is passed at the meeting any of the following resolutions—

• (a) that the trustee's resignation be accepted,

• (b) that a new trustee be appointed,

• (c) that the resigning trustee be not given his release,

the chairman shall, within 3 days, send to the official receiver a copy of the resolution.

If it has been resolved to accept the trustee's resignation, the chairman shall send to the official receiver a certificate to that effect.

• (4) If the creditors have resolved to appoint a new trustee, the certificate of his appointment shall also be sent to the official receiver within that time; and Rule 6.120 above shall be complied with in respect of it.

• (5) If the trustee's resignation is accepted, the notice of it required by section 298(7) shall be given by him forthwith after the meeting; and he shall send a copy of the notice to the official receiver.

The notice shall be accompanied by a copy of the account sent to creditors under Rule 6.126(2).

• (6) The official receiver shall file a copy of the notice in court.

• (7) The trustee's resignation is effective as from the date on which the official receiver files the copy notice in court, that date to be endorsed on the copy notice.

Leave to resign granted by the court

6.128

• (1) If at a creditors' meeting summoned to accept the trustee's resignation it is resolved that it be not accepted, the court may, on the trustee's application, make an order giving him leave to resign.

• (2) The court's order under this Rule may include such provision as it thinks fit with respect to matters arising in connection with the resignation, and shall determine the date from which the trustee's release is effective.

• (3) The court shall send two sealed copies of the order to the trustee, who shall send one of the copies forthwith to the official receiver.

• (4) On sending notice of his resignation to the court, as required by section 298(7), the trustee shall send a copy of it to the official receiver.

Meeting of creditors to remove trustee

6.129

• (1) Where a meeting of creditors is summoned for the purpose of removing the trustee, the notice summoning it shall indicate that this is the purpose, or one of the purposes, of the meeting; and the notice shall draw the attention of creditors to section 299(3) with respect to the trustee's release.

• (2) A copy of the notice shall at the same time also be sent to the official receiver.

• (3) At the meeting, a person other than the trustee or his nominee may be elected to act as chairman; but if the trustee or his nominee is chairman and a resolution has been proposed for the trustee's removal, the chairman shall not adjourn the meeting without the consent of at least one-half (in value) of the creditors present (in person or by proxy) and entitled to vote.

• (4) Where the chairman of the meeting is other than the official receiver, and there is passed at the meeting any of the following resolutions—

• (a) that the trustee be removed,

• (b) that a new trustee be appointed,

• (c) that the removed trustee be not given his release,

the chairman shall, within 3 days, send to the official receiver a copy of the resolution.

If it has been resolved to remove the trustee, the chairman shall send to the official receiver a certificate to that effect.

• (5) If the creditors have resolved to appoint a new trustee, the certificate of his appointment shall also be sent to the official receiver within that time; and Rule 6.120 shall be complied with in respect of it.

Court's power to regulate meeting under Rule 6.129

6.130

Where a meeting under Rule 6.129 is to be held, or is proposed to be summoned, the court may on the application of any creditor give directions as to the mode of summoning it, the sending out and return of forms of proxy, the conduct of the meeting, and any other matter which appears to the court to require regulation or control.

Procedure on removal

6.131

• (1) Where the creditors have resolved that the trustee be removed, the official receiver shall file the certificate of removal in court.

• (2) The resolution is effective as from the date on which the official receiver files the certificate of removal in court, and that date shall be endorsed on the certificate.

• (3) A copy of the certificate, so endorsed, shall be sent by the official receiver to the trustee who has been removed and, if a new trustee has been appointed, to him.

• (4) The official receiver shall not file the certificate in court until the Secretary of State has certified to him that the removed trustee has reconciled his account with that held by the Secretary of State in respect of the bankruptcy.

Removal of trustee by the court

6.132

• (1) This Rule applies where application is made to the court for the removal of the trustee, or for an order directing the trustee to summon a meeting of creditors for the purpose of removing him.

• (2) The court may, if it thinks that no sufficient cause is shown for the application, dismiss it; but it shall not do so unless the applicant has had an opportunity to attend the court for an ex parte hearing, of which he has been given at least 7 days' notice.

If the application is not dismissed under this paragraph, the court shall fix a venue for it to be heard.

• (3) The applicant shall, at least 14 days before the hearing, send to the trustee and the official receiver notice stating the venue so fixed; and the notice shall be accompanied by a copy of the application, and of any evidence which the applicant intends to adduce in support of it.

• (4) Subject to any contrary order of the court, the costs of the application do not fall on the estate.

• (5) Where the court removes the trustee—

• (a) it shall send copies of the order of removal to him and to the official receiver;

• (b) the order may include such provision as the court thinks fit with respect to matters arising in connection with the removal; and

• (c) if the court appoints a new trustee, Rule 6.121 applies.

Removal of trustee by Secretary of State

6.133

• (1) If the Secretary of State decides to remove the trustee, he shall before doing so notify the trustee and the official receiver of his decision and the grounds of it, and specify a period within which the trustee may make representations against implementation of the decision.

• (2) If the Secretary of State directs the removal of the trustee, he shall forthwith—

• (a) file notice of his decision in court, and

• (b) send notice to the trustee and the official receiver.

• (3) If the trustee is removed by direction of the Secretary of State, the court may make any such order in his case as it would have power to make if he had been removed by itself.

Advertisement of resignation or removal

6.134

Where a new trustee is appointed in place of one who has resigned or been removed, the new trustee shall, in the advertisement of his appointment, state that his predecessor has resigned or, as the case may be, been removed and (if it be the case) that he has been given his release.

Release of resigning or removed trustee

6.135

• (1) Where the trustee's resignation is accepted by a meeting of creditors which has not resolved against his release, he has his release from when his resignation is effective under Rule 6.127.

• (2) Where the trustee is removed by a meeting of creditors which has not resolved against his release, the fact of his release shall be stated in the certificate of removal.

• (3) Where—

• (a) the trustee resigns, and the creditors' meeting called to receive his resignation has resolved against his release, or

• (b) he is removed by a creditors' meeting which has so resolved, or is removed by the court,

he must apply to the Secretary of State for his release.

• (4) When the Secretary of State gives the release, he shall certify it accordingly, and send the certificate to the official receiver, to be filed in court.

• (5) A copy of the certificate shall be sent by the Secretary of State to the former trustee, whose release is effective from the date of the certificate.

SECTION C: RELEASE ON COMPLETION OF ADMINISTRATION

Release of official receiver

6.136

• (1) The official receiver shall, before giving notice to the Secretary of State under section 299(2) (that the administration of the estate is for practical purposes complete), send out notice of his intention to do so to all creditors who have proved their debts, and to the bankrupt.

• (2) The notice shall in each case be accompanied by a summary of the official receiver's receipts and payments as trustee.

• (3) The Secretary of State, when he has under section 299(2) determined the date from which the official receiver is to have his release, shall give notice to the court that he has done so. The notice shall be accompanied by the summary referred to in paragraph (2).

Final meeting of creditors

6.137

• (1) Where the trustee is other than the official receiver, he shall give at least 28 days' notice of the final meeting of creditors to be held under section 331. The notice shall be sent to all creditors who have proved their debts, and to the bankrupt.

• (2) The trustee's report laid before the meeting under that section shall include—

• (a) a summary of his receipts and payments, and

• (b) a statement by him that he has reconciled his account with that which is held by the Secretary of State in respect of the bankruptcy.

• (3) At the final meeting, the creditors may question the trustee with respect to any matter contained in his report, and may resolve against him having his release.

• (4) The trustee shall give notice to the court that the final meeting has been held; and the notice shall state whether or not he has been given his release, and be accompanied by a copy of the report laid before the final meeting. A copy of the notice shall be sent by the trustee to the official receiver.

• (5) If there is no quorum present at the final meeting, the trustee shall report to the court that a final meeting was summoned in accordance with the Rules, but there was no quorum present; and the final meeting is then deemed to have been held, and the creditors not to have resolved against the trustee having his release.

• (6) If the creditors at the final meeting have not so resolved, the trustee is released when the notice under paragraph (4) is filed in court. If they have so resolved, the trustee must obtain his release from the Secretary of State, as provided by Rule 6.135.

SECTION D: REMUNERATION

Fixing of remuneration

6.138

• (1) The trustee is entitled to receive remuneration for his services as such.

• (2) The remuneration shall be fixed either—

• (a) as a percentage of the value of the assets in the bankrupt's estate which are realised or distributed, or of the one value and the other in combination, or

• (b) by reference to the time properly given by the insolvency practitioner (as trustee) and his staff in attending to matters arising in the bankruptcy.

• (3) Where the trustee is other than the official receiver, it is for the creditors' committee (if there is one) to determine whether his remuneration is to be fixed under paragraph (2)(a) or (b) and, if under paragraph (2)(a), to determine any percentage to be applied as there mentioned.

• (4) In arriving at that determination, the committee shall have regard to the following matters—

• (a) the complexity (or otherwise) of the case,

• (b) any respects in which, in connection with the administration of the estate, there falls on the insolvency practitioner (as trustee) any responsibility of an exceptional kind or degree,

• (c) the effectiveness with which the insolvency practitioner appears to be carrying out, or to have carried out, his duties as trustee, and

• (d) the value and nature of the assets in the estate with which the trustee has to deal.

• (5) If there is no creditors' committee, or the committee does not make the requisite determination, the trustee's remuneration may be fixed (in accordance with paragraph (2)) by a resolution of a meeting of creditors; and paragraph (4) applies to them as it does to the creditors' committee.

• (6) If not fixed as above, the trustee's remuneration shall be on the scale laid down for the official receiver by general regulations.

Other matters affecting remuneration

6.139

• (1) Where the trustee sells assets on behalf of a secured creditor, he is entitled to take for himself, out of the proceeds of sale, a sum by way of remuneration equivalent to the remuneration chargeable in corresponding circumstances by the official receiver under general regulations.

• (2) Where there are joint trustees, it is for them to agree between themselves as to how the remuneration payable should be apportioned. Any dispute arising between them may be referred—

• (a) to the court, for settlement by order, or

• (b) to the creditors' committee or a meeting of creditors, for settlement by resolution.

• (3) If the trustee is a solicitor and employs his own firm, or any partner in it, to act on behalf of the estate, profit costs shall not be paid unless this is authorised by the creditors' committee, the creditors or the court.

Recourse of trustee to meeting of creditors

6.140

If the trustee's remuneration has been fixed by the creditors' committee, and he considers the rate or amount to be insufficient, he may request that it be increased by resolution of the creditors.

Recourse to the court

6.141

• (1) If the trustee considers that the remuneration fixed for him by the creditors' committee, or by resolution of the creditors, or as under Rule 6.138(6), is insufficient, he may apply to the court for an order increasing its amount or rate.

• (2) The trustee shall give at least 14 days' notice of his application to the members of the creditors' committee; and the committee may nominate one or more members to appear or be represented, and to be heard, on the application.

• (3) If there is no creditors' committee, the trustee's notice of his application shall be sent to such one or more of the bankrupt's creditors as the court may direct, which creditors may nominate one or more of their number to appear or be represented.

• (4) The court may, if it appears to be a proper case, order the costs of the trustee's application, including the costs of any member of the creditors' committee appearing or being represented on it, or any creditor so appearing or being represented, to be paid out of the estate.

Creditor's claim that remuneration is excessive

6.142

• (1) Any creditor of the bankrupt may, with the concurrence of at least 25 per cent. in value of the creditors (including himself), apply to the court for an order that the trustee's remuneration be reduced, on the grounds that it is, in all the circumstances, excessive.

• (2) The court may, if it thinks that no sufficient cause is shown for the application, dismiss it; but it shall not do so unless the applicant has had an opportunity to attend the court for an ex parte hearing, of which he has been given at least 7 days' notice.

If the application is not dismissed under this paragraph, the court shall fix a venue for it to be heard.

• (3) The applicant shall, at least 14 days before the hearing, send to the trustee a notice stating the venue so fixed; and the notice shall be accompanied by a copy of the application, and of any evidence which the applicant intends to adduce in support of it.

• (4) If the court considers the application to be well-founded, it shall make an order fixing the remuneration at a reduced amount or rate.

• (5) Unless the court orders otherwise, the costs of the application shall be paid by the applicant, and do not fall on the estate.

SECTION E: SUPPLEMENTARY PROVISIONS

Trustee deceased

6.143

• (1) Subject as follows, where the trustee (other than the official receiver) has died, it is the duty of his personal representatives to give notice of the fact to the official receiver, specifying the date of the death.

This does not apply if notice has been given under any of the following paragraphs of this Rule.

• (2) If the deceased trustee was a partner in a firm, notice may be given to the official receiver by a partner in the firm who is qualified to act as an insolvency practitioner, or is a member of any body recognised by the Secretary of State for the authorisation of insolvency practitioners.

• (3) Notice of the death may be given by any person producing to the official receiver the relevant death certificate or a copy of it.

• (4) The official receiver shall give notice to the court, for the purpose of fixing the date of the deceased trustee's release in accordance with section 299(3)(a).

Loss of qualification as insolvency practitioner

6.144

• (1) This Rule applies where the trustee vacates office, under section 298(6), on his ceasing to be qualified to act as an insolvency practitioner in relation to the bankrupt.

• (2) The trustee vacating office shall forthwith give notice of his doing so to the official receiver, who shall give notice to the Secretary of State.

The official receiver shall file in court a copy of his notice under this paragraph.

• (3) Rule 6.135 applies as regards the trustee obtaining his release, as if he had been removed by the court.

Notice to official receiver of intention to vacate office

6.145

• (1) Where the trustee intends to vacate office, whether by resignation or otherwise, he shall give notice of his intention to the official receiver together with notice of any creditors' meeting to be held in respect of his vacation of office, including any meeting to receive his resignation.

• (2) The notice to the official receiver must be given at least 21 days before any such creditors' meeting.

• (3) Where there remains in the bankrupt’s estate any property which has not been realised, applied, distributed or otherwise fully dealt with in the bankruptcy, the trustee shall include in his notice to the official receiver details of the nature of that property, its value (or the fact that it has no value), its location, any action taken by the trustee to deal with that property or any reason for his not dealing with it, and the current position in relation to it.

Trustee's duties on vacating office

6.146

• (1) Where the trustee ceases to be in office as such, in consequence of removal, resignation or cesser of qualification as an insolvency practitioner, he is under obligation forthwith to deliver up to the person succeeding him as trustee the assets of the estate (after deduction of any expenses properly incurred, and distributions made, by him) and further to deliver up to that person—

• (a) the records of the bankruptcy, including correspondence, proofs and other related papers appertaining to the bankruptcy while it was within his responsibility, and

• (b) the bankrupt's books, papers and other records.

• (2) When the administration of the bankrupt's estate is for practical purposes complete, the trustee shall forthwith file in court all proofs remaining with him in the proceedings.

Power of court to set aside certain transactions

6.147

• (1) If in the administration of the estate the trustee enters into any transaction with a person who is an associate of his, the court may, on the application of any person interested, set the transaction aside and order the trustee to compensate the estate for any loss suffered in consequence of it.

• (2) This does not apply if either—

• (a) the transaction was entered into with the prior consent of the court, or

• (b) it is shown to the court's satisfaction that the transaction was for value, and that it was entered into by the trustee without knowing, or having any reason to suppose, that the person concerned was an associate.

• (3) Nothing in this Rule is to be taken as prejudicing the operation of any rule of law or equity with respect to a trustee's dealings with trust property, or the fiduciary obligations of any person.

Rule against solicitation

6.148

• (1) Where the court is satisfied that any improper solicitation has been used by or on behalf of the trustee in obtaining proxies or procuring his appointment, it may order that no remuneration out of the estate be allowed to any person by whom, or on whose behalf, the solicitation was exercised.

• (2) An order of the court under this Rule overrides any resolution of the creditors' committee or the creditors, or any other provision of the Rules relating to the trustee's remuneration.

Enforcement of trustee's obligations to official receiver

6.149

• (1) The court may, on the application of the official receiver, make such orders as it thinks necessary for enforcement of the duties of the trustee under section 305(3) (information and assistance to be given; production and inspection of books and records relating to the bankruptcy).

• (2) An order of the court under this Rule may provide that all costs of and incidental to the official receiver's application shall be borne by the trustee.