2.5 Distributing the estate Flashcards
General rule as to priority?
expenses or costs which—
(i) are properly chargeable or incurred by the official receiver or the trustee in preserving, realising or getting in any of the assets of the bankrupt or otherwise relating to the conduct of any legal proceedings which the bankrupt has power to bring (whether the claim on which the proceedings are based forms part of the bankrupt’s estate or otherwise) or defend,
ii) shorthand writer in connection with an examination
iii) relating to an examination
b) Any other expenses incurred or disbursements including relating to carrying on business
c) OR fees other than d
d( OR general fee
*e) repayment of sum deposited as security for fee
….
i) costs of petitioner
j) remuneration of any special manager
k) expenses for preparation of SA
…
n) disbursements by trustee, inc creditors’ committee expenses
o) remuneration of any person who has been employed by trustee to perform services for the bkt’s estate
**p) REMUNERATION OF TRUSTEE up to any amount not exceeding that which is payable under such 11.
q) capital gains tax on chargeable gains
*r) balance of remuneration due to trustee
s) any other expenses chargeable by trustee
What are the OR’s fees?
OR’s administration fee:
Debtor’sapplication £1,990
Creditor’spetition £2,775
OR’s general £6，000
OR’s fee for acting as trustee 15% of receipts
IPO/IPA fee £150
What are the costs of a bankruptcy application?
Debtor’s application: £680
Adjudicator fee £130
Deposit £550
Creditor’s petition: £1,802
Court fee £302
Deposit £1,500
When must a trustee provide a fees estimate?
Where the trustee proposes to take all or any part of the remuneration on a time spent basis, they must provide:
a fees estimate; and
details of the expenses the office-holder considers will be, or are likely to be, incurred
They must not draw remuneration in excess of the total amount set out in the fees estimate without approval of the body who fixed the basis
How are the trustee’s fees approved?
Must be approved prior to payment
1) Creditors’ committee
2) If no creditors’ committee by decision procedure
3) If the creditors do not approve the trustee’s fees,or do so in an amount with which the trustee is dissatisfied, the trustee can apply to court
Where:
the trustee has requested the creditors fix the basis of remuneration and they
have not done so; or
The trustee’s remuneration is not fixed by the creditors within 18 months after the date of the liquidator’s or trustee’s appointment
The trustee is entitled to the fees on a scale set out in Schedule 11
When can category 2 expenses (SIP 9 concept) be paid?
Category 2 expenses can only be paid with the approval of the creditors in the same manner as remuneration
When does the default basis for trustee’s fees become payable?
Where:
the trustee has requested the creditors fix the basis of remuneration and they
have not done so; or
The trustee’s remuneration is not fixed by the creditors within 18 months after the date of the liquidator’s or trustee’s appointment
The trustee is entitled to the fees on a scale set out in Schedule 11
When can secured or unsecured creditors request further information about remuneration or expenses following receipt of a progress or final report?
Within 21 days of receipt
How long does the trustee have to respond to creditor requests for information ?
14 day unless:
excessively time consuming
prejudice conduct of bky
expose a person to risk of violence
OH subject to an obligation of confidentiality
Who and when can remuneration be challenged as being excessive?
Within 8 weeks from the delivery of the progress or final report which first reports the charging complained of
A securedcreditor
Or an unsecured creditor
With the concurrence of at least 10% in value of unsecured creditors
Or with the permission of the court
May make an application to court on the ground that
The remuneration charged by the office holder is in all the circumstances excessive;or
The basis is in appropriate; or
The expenses incurred are in all the circumstances excessive
Which debts are not provable in bankruptcy?
An obligation arising under a criminal confiscation order
An obligation arising from a payment under the Social Security Contributions and Benefits Act 1992 by way of crisis loan or budgeting loan
a fine imposed for an offence
an obligation (other than an obligation to pay a lump sum or to pay costs) arising under an order made in family proceedings, or
an obligation arising under a maintenance assessment made under the Child Support Act 1991
The bankrupt will remain liable for these debts, even after discharge
When should a dividend be made?
Whenever the trustee has sufficient funds in hand for the purpose he shall declare and distribute dividends among the creditors in respect of the bankruptcy debts which they have proved
subject to the retention of such sums as may be necessary for the expenses of the bankruptcy
What is the process for making a distribution?
1 - notice of intention to declare and distribute
2 - once declared - notice of dividend
When calculating a dividend, what must the trustee make provision for?
any bankruptcy debts which by reason of the distance of their place of residence, may not have had sufficient time to tender and establish their proofs,
any bankruptcy debts which are the subject of claims which have not yet been determined, and
for disputed proofs and claims.
When must a final dividend be made?
When the trustee has realised all the bankrupt’s estate or so much of it as can be realised without needlessly protracting the trusteeship, he shall give notice in the prescribed manner either
of his intention to declare a final dividend, or
that no dividend, or further dividend, will be declared.
The notice shall contain the prescribed particulars and shall require claims against the bankrupt’s estate to be established by a date (“the final date”) specified in the notice.
The court may, on the application of ANY PERSON, postpone the final date.
