Module 11 - Bankruptcy Continued Flashcards
Considerations when fixing the Basis of Fees
Complexity of Case;
Responsibilities to be looked after;
Excessive Work;
Value of Assets
Different fee basis
% of Value of Assets realised or Distributed;
Time properly given attending to matters;
A Set Amount
What is Rule 18.23?
Material and substantive change in circumstances can apply to change remuneration
What is Rule 18.24?
Can draw fees in excess of original basis with reasons, details, new timings, and expected hourly rate of new work
Guiding Principles for Fees?
Reasonable;
Transparent;
Consistent;
Useful to Creditors;
Proportionate to Case
Reasons to form a Committee?
Represent Creditor Wishes;
Police activities of Trustee;
Provide Expert guidance / views;
Agree Remuneration;
Sanction specific actions of Trustee;
Receive reports from trustee;
Request meetings from trustee
Key Facts of Creditors’ Committees
3 - 5 Members;
Inform creditors of their right to form every time they are contacted;
Trustee must report to Committee;
Committee Member cannot profit from membership;
Member must leave Committee if absent for 3 consecutive meetings;
Trustee to send written report to Committee when requested
What is Section 284?
‘Post petition disposition’. Disposal of assets after the petition but before ‘vesting’ (when trustee takes charge)
What is Section 340?
Disposal of assets before the petition, PREFERENCE
What is the Defence against Section 284 for recipients of a disposition?
Section 284(4);
Received property before commencement of Bankruptcy;
Received without notice of Bankruptcy;
Received it for Value;
Received in Good Faith;
Transactions at an Undervalue in Personal Insolvency, which Section?
Section 339
3 Things to Prove in Section 339?
Transaction was a gift (no consideration involved / consideration was significantly less);
Anterior Period / Relevant Time (5 years back from date of petition);
Insolvency (if transaction took place within 2 years from petition - you DO NOT NEED to prove insolvency / if transaction took place between 2 and 5 years - you do need to prove insolvency. But insolvency is presumed if the party is connected)
4 Remedy Options for Section 339?
Any property returned to Trustee;
Any proceeds from sale transaction;
Release or discharge of any security given by the Bankrupt;
Pay moneys to the Trustee representing benefit received
What is Section 340? And what are the 3 things to prove?
Preferences;
Desire - influenced by desire to place other party in better position than if preference hadn’t been given;
Anterior Period - 6 months (unconnected) - 2 years (connected) - 5 years (if transaction was also TAUV);
Insolvency - at the time of the transaction, or as a result of the transaction
What is Section 342a? And how many things do you need to prove? And what are they?
Excessive Pension Contributions;
Two;
Contributions were ‘excessive’;
Unfairly prejudiced Creditors
What is Section 343?
Extortionate Credit Transactions
Define Extortionate Credit Transaction?
A transaction that is ‘exorbitant’ or otherwise ‘grossly contravenes the ordinary principles of fair dealing’
Anterior period for Extortionate Credit Transactions
3 Years
What is Section 423? How many things to Prove? What are they?
Transactions Defrauding Creditors;
2;
Whether it was a gift or significantly less consideration was received;
Intent - prejudice interests of victims or to defeat claim of claimant / potential claimant
Who pursues Section 423 claims?
Victim rather than officeholder
What is the anterior period for Section 423?
TRICK QUESTION - THERE IS NO ANTERIOR PERIOD FOR SECTION 423
What is Section 285?
Court Imposed Moratorium;
Restricts actions against Bankrupts;
Prevents creditors proceeding against bankrupt or property;
Not general or automatic stay on proceedings
What is Section 353?
Non-Disclosure - not provided details of their assets
What is Section 354?
Concealment of property - purposefully hidden assets
