BASSETERRE, St. Kitts, July 16th 2013 (CUOPM) – A Bill, which seeks to make provision for the law, practice and procedure of both individual and corporate insolvency will be debated in the National Assembly of St. Kitts and Nevis on Wednesday. The Bankruptcy and Insolvency Bill, 2013, replaces the Bankruptcy Act passed in 1889 that came into force in September 1st 1893. The new Act, in the name of Attorney General, the Hon. Jason Hamilton, is divided into Eleven Parts also seeks to facilitate the rehabilitation of the insolvent debtor and to provide for the effective or efficient delivery of insolvency service and for related or incidental matters. According to the 163-page legislation, Part I of the Bill deals with matters of a preliminary nature, that is to say, the short title of the Bill and definitions of certain terms or words used in the Bill. Certain terms have been carefully defined with a particular purpose in mind. For instance, the term “books and records” is given a contemporary definition in order to march with modern trends. The definition seeks to include documents as well as data maintained or processed manually, mechanically, photographically or electronically by any information storage device. This definition would be very crucial in establishing whether a person is insolvent or bankrupt. Further, it should be observed that the term “corporation” as defined means that the legislation is not intended to apply to banks and insurance companies, since they are regulated under different legal regimes in that area. Part II of the Bill makes provision for administrative officials, namely, the Supervisor of Insolvency, and trustees. In that connection, this Part seeks to set up the office of Supervisor of Insolvency as a public office and to set out the duties of the Supervisor, while it also seeks to make provision for the licensing, conduct and duties of trustees. Clause 4 seeks to establish the post of Supervisor of Insolvency, whose office is to be a public office.The Supervisor shall be responsible for supervising the administration of all estates and matters to which this Act would apply. The Supervisor will have power to intervene in any matter or proceeding to which the Act would apply where the Supervisor considers it convenient to do so. Clause 5 seeks to give the Supervisor access to, and the right to examine, the banking accounts of a trustee in which estate funds may have been deposited. Clause 6 seeks to make provision for suspected offences, and in that connection the Clause seeks to empower the Supervisor to carry out or to make enquiries or investigations where he or she has reasonable grounds to suspect that a person has committed an offence in connection with the estate or matter to which the Act applies. Clause 7 makes provision for the maintenance of public records relating to insolvencies. This Clause provides that the Supervisor shall keep or cause to be kept a public record of proposals, bankruptcies, licences issued to trustees by the Supervisor and notices sent to the Supervisor under section 66. Clause 8 seeks to empower the Supervisor to issue licences to trustees. Clauses 9, 10, 11, and 12 make provision in respect the form of licence, licence fees, validity of licence, and suspension and cancellation of licence, respectively. Clauses 13, 14, 15, and 16 make provision for the conduct of trustees. Clauses 17 to 20 deal with the substitution of a trustee, whiles Clauses 21 and 22 deal with the removal of trustee by Court and appointment of non-licensed trustee by the Supervisor. Clause 23 seeks to provide that where a trustee accepts an appointment in relation to matters relating to assignments, bankruptcy orders or proposals, such trustee shall perform the duties required of a trustee until he or she is discharged or another trustee is appointed in that trustee’s place. It also seeks to provide that a trustee will be protected from damages for environmental liability which arose before or after the trustee’s appointment as long as the trustee is not found guilty of gross negligence. Clauses 30 to 50 make provision for the duties and powers of trustees. Clause 51 seeks to allow a party that is aggrieved by any act or decision of a trustee to apply to Court for an order to reverse or modify the act or decision. Clause 52 seeks to allow a creditor, with Court approval, to pursue necessary action where the trustee refuses or neglects to act. Clauses 53 and 54 make provision for the remuneration of trustees. Part III of the Bill makes provision for the making of bankruptcy orders and assignments. Clause 56 sets out the circumstances in respect of which a debtor commits an act of bankruptcy. Clause 57 seeks to allow creditor(s) to file a petition in Court for a bankruptcy order against a debtor where it is alleged in the petition that the debt or debts owing to the petitioner(s) amount to $1,000.00, and that the debtor has committed an act of bankruptcy. Clauses 60 to 74 make provision for the appointment of interim receivers, their duties and other related matters. Clause 75 makes provision for persons who can make an assignment. It also seeks to provide for the filing of a sworn statement of affairs at the time of filing of the assignment into bankruptcy, which statement is to enable a trustee to notify creditors and start on his or her administration. Part IV of this Bill primarily seeks to provide for the making of proposals, the voting procedure for a proposal, the commencement of proceedings, the duties of a trustee and the refusal, approval or annulment of a proposal. Clause 76 seeks to specify the persons who can make proposals and the persons to whom proposals may be made. The Clause sets out the voting procedure and provides that a proposal may include or exclude secured creditors, according to the wishes of a debtor. Under this Clause, the trustee is required to make an appraisal of the financial affairs of the debtor in order to ascertain the cause of the debtor’s financial difficulties or insolvency. Further, a trustee appointed under a proposal is required to monitor the business affairs of an insolvent until a meeting of creditors is held as provided in Clause 82. Finally, this Clause requires the trustee to prepare and submit to the creditors and the Supervisor a report on the state of the business and financial affairs of the insolvent person. Clause 77 makes provision for the filing of a secured claim with the trustee by a creditor to whom a proposal is made and for such other matters related thereto.Clause 80 seeks to allow an insolvent person to file a notice of intention with the Supervisor before the insolvent person lodges a copy of a proposal with a licensed trustee. Clauses 81 to 84 make provision in respect to assistance in preparation of proposal by trustee; meeting of creditors; adjournment of meeting; and voting prior to meeting by proven creditors. Clause 85 seeks to allow creditors to vote on the proposal by separate classes established by the debtor and based on the commonality of creditors’ claims. It also seeks to require a special resolution of creditors for the acceptance of a proposal. Clauses 86 and 87 seek to make provision for the inclusion of terms of supervision in a proposal, and the appointment of inspectors by creditors, respectively. Clause 88 seeks to provide that where the creditors reject or refuse a proposal the rejection or refusal shall result in the debtor’s deemed bankruptcy. Clause 90 makes provision for the making of an application to Court for approval where a proposal has been approved by creditors. Clause 91 makes provision for a situation where the Court may refuse a proposal if the Court is of opinion that the terms of the proposal are not reasonable or are not calculated to benefit the general body of creditors. Clause 92 seeks to allow Court to refuse to approve any proposal which does not provide for the payment in priority to other claims of all claims directed to be so paid in the distribution of the property of a debtor and for the payment of all proper fees and expenses of the trustee. Clause 99 makes provision for the effects of the filing of a proposal and provides that specified agreements may not be terminated or amended. The Clause also seeks to prevent service providers from discontinuing service to an insolvent person in specified cases. Part V of the Bill makes provision for the property of the bankrupt which is available to the bankrupt’s creditors, establishes preferences in relation to claims by unpaid sellers, farmers and fishermen for products supplied prior to bankruptcy. Clause 102 specifies or identifies the property that is divisible among the bankrupt’s creditors.
Posted on: Wed, 17 Jul 2013 15:10:47 +0000
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