STUDY UNIT 9 Flashcards
Define the meeting of creditors
It is meetings held with the insolvent’s creditors to establish claims, elect the trustee and give directions on the winding up of the estate.
Name the types of meetings
1) First meeting
2) Second meeting
3) Special meeting
4) General meeting
Discuss the first meeting
The first meeting gets called by the Master. The notice of the meeting needs to be published at least 10 days before the meeting takes place. The purpose of this meeting is for creditors to to choose a trustee and to establish claims.
Discuss the second meeting
It gets called by the trustee. The notice needs to get published in the local newspaper and the government gazette. The purpose of the meeting is to enable creditors to prove claims; to receive the trustee’s reports on affairs and to give the trustee directions on the administration of the estate.
Discuss the special meeting
It gets called by the trustee. The notice needs to get published in the local newspaper and the government gazette. The meeting takes place for one of two reasons: 1) proof of claims
2) interrogation of the insolvent
Section 44(1) states however that there is only 3 months to call the meeting after the second one.
Discuss the general meeting
It gets called by trustee. The notice needs to get published in the local newspaper and government gazette. The meeting can be called at any time. The purpose of this meeting is to discuss any unsolved matters regarding the administration of the estate.
Discuss the steps to proof a claim
1) documents lodged - affidavit - look at facts of claim; nature and particulars of claim; whether claim took place through cession; and the nature and particulars of security held by creditor for claim
2) time and place of documents lodged - 24 hours to presiding officer; not in time=claim cannot be admitted
3) examination of documents by creditors
4)attendance by creditors - not compulsory
5) interrogation of creditors - can take place by presiding officer; trustee or a creditor who has already proved a claim
6) adjudication on claims by presiding officer - presiding officer must admit or reject claim
7) trustee examination on admitted claims- trustee may repudiate presiding officer, onus of proof
8) action established by disputed claims
9) review of decision on proof of claims
Name the important cases under adjudication by presiding officer
1) Hassim Moti v Insolvent Estate M Joosub
2) Standard Bank SA v Master of High Court
Discuss creditor’s voting power
- creditors who proved claims may vote
- they may vote on all matters relating to administration of insolvent estate
- cannot vote on matters relating to distribution of assets
How does the vote get determined?
- Section 52(2) = through value of claim
- Section 52(3) = through value of votes cast
- Section 54(4) = election of trustee is through number and value
How does the voting take place?
- in person or through an agent
- creditor may give power of attorney to someone else to vote
- Caledon Trust and Fire Assurance v Magistrate of Riversdale = telegram
Person’s disallowed from voting
- trustee and his employer
- relatives and spouse
- co-employee who works for same employer
- any other person who has direct/indirect interest in trustee’s remuneration
Creditor’s resolutions
- resolutions must be recorded in minutes and are binding in trustee
- binding on creditors as well
- court may set aside any creditor’s resolutions if they were taken irregularly; mala fide or infringes on the right of the creditor.
Interrogation of witnesses
Section 64(2) = insolvent/any other person may be summoned to appear by presiding officer or creditors
When may you summon someone?
- reasonably believed that person possess or was in possession of any property belonging to insolvent
- any person on reasonable grounds known to be indebted to the estate
- any person who can give material info regarding insolvent’s affairs
