BANKRUPTCY LAW (1997 Revision)

CAYMAN ISLANDS BANKRUPTCY LAW (1997 Revision) Supplement No. 3 published with Gazette No. 19 of 15th September, 1997. PUBLISHING DETAILS Revised under the authority of the Law Revision Law (19 of 1975). Originally enacted- Cap. 7-1st January, 1964. Revised this 2nd day of September, 1997. Page 2 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Arrangement of Sections CAYMAN ISLANDS BANKRUPTCY LAW (1997 Revision) Arrangement of Sections Section Page PART I - Introductory 1. Short title ................................................................................................................................. 11 2. Definitions ................................................................................................................................ 11 PART II - Constitution And Jurisdiction Of Court 3. Chief Court of Bankruptcy ........................................................................................................ 12 4. Proceedings in bankruptcy ....................................................................................................... 13 5. Powers of Court to decide all questions ................................................................................... 13 6. Sittings in Court ....................................................................................................................... 13 7. Trial of questions of fact by jury ............................................................................................... 13 8. Court may vary orders ............................................................................................................. 13 9. Appeals ................................................................................................................................... 14 10. Powers as to costs................................................................................................................... 14 11. Fees, how fixed, payable and applicable .................................................................................. 14 PART III - Trustee In Bankruptcy 12. Trustee in Bankruptcy .............................................................................................................. 14 13. Power to appoint agents, etc.................................................................................................... 14 PART IV - Proceedings On A Bankruptcy Petition 14. Who may be petitioning creditors, and acts of bankruptcy ........................................................ 16 15. Debtor’s petition ....................................................................................................................... 18 c Revised as at 2nd day of September, 1997. Page 3 Arrangement of Sections Bankruptcy Law 16. Creditor’s petition, how to be verified ....................................................................................... 18 17. Debtor’s petition, what statement to accompany same ............................................................ 18 PART V - Appointment Of Receiver 18. Appointment of Receiver; his powers and duties ...................................................................... 19 PART VI - Parties To Proceedings Under A Petition 19. Companies may proceed by agent........................................................................................... 19 20. Firms may be named by their style .......................................................................................... 19 21. Special provision as to certain companies ............................................................................... 19 PART VII - Consolidating, Staying, Adjourning, Continuing And Dismissing Proceedings Under A Petition 22. Consolidating petitions against partners separately ................................................................. 20 23. Consolidating petitions against same debtor ............................................................................ 20 24. Staying proceedings ................................................................................................................ 20 25. Adjourning and dismissing petitions ......................................................................................... 20 26. Substitution of other creditor as petitioner in case of delay ....................................................... 20 27. Proceedings continued though debtor dies .............................................................................. 20 PART VIII - Provisional And Absolute Orders For Bankruptcy 28. Notice of petition need not be served ....................................................................................... 20 29. Provisional order, when to be made ......................................................................................... 21 30. Service of provisional order ..................................................................................................... 21 31. Revocation of provisional order ................................................................................................ 21 32. Order for debtor to file statement of his affairs, and service thereof .......................................... 21 33. Absolute order for bankruptcy .................................................................................................. 21 34. Effect of order as to staying proceedings to recover debts ....................................................... 21 35. Relation back to provisional order ............................................................................................ 22 36. Debtor’s property, when and how divisible ............................................................................... 22 37. Debtor’s property, when it vests in Trustee, and when and how to be administered ................. 22 38. Duty of Trustee ........................................................................................................................ 22 39. Duty of debtor to aid Trustee ................................................................................................... 23 40. When debtor punishable as for a contempt of Court ................................................................ 23 PART IX - Meeting Of Creditors And Resolutions 41. Meeting of creditors, when to be summoned ............................................................................ 23 42. Meeting, how to be held and conducted, and as to voting thereat ............................................ 23 43. Duty and power of Trustee at meeting ..................................................................................... 24 44. Resolutions at meeting ............................................................................................................ 24 45. Report to the Court as to resolutions ........................................................................................ 25 46. Procedure on resolution for deed of arrangement .................................................................... 25 47. Absolute order for bankruptcy, when to be made ..................................................................... 25 Page 4 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Arrangement of Sections PART X - Proceedings Under An Order For A Deed Of Arrangement 48. Deed of arrangement, how made, executed, proved and filed .................................................. 25 49. Consideration of deed by the Court.......................................................................................... 26 50. Conditions for confirmation ...................................................................................................... 26 51. Proceedings when deed is not confirmed ................................................................................. 26 52. Proceedings on confirmation of deed ....................................................................................... 26 53. Confirmation of deed conclusive as to its validity ..................................................................... 27 54. Administration of estate under confirmed deed ........................................................................ 27 55. Discharge of debtor when deed carried out .............................................................................. 27 56. When deed may be declared void, and effect thereof .............................................................. 27 57. Deeds of arrangement in cases of partners ............................................................................. 28 58. Assent of certain creditors in cases of partners ........................................................................ 28 59. Debt incurred, increased or forborne, by means of fraud .......................................................... 28 60. Rights of creditors against third parties not affected ................................................................. 28 61. Administration of estate on confirmation of deed ...................................................................... 28 PART XI - Proceedings Under An Absolute Order For Bankruptcy 62. Examination of debtor, and into his affairs ............................................................................... 29 63. Omission to keep or produce proper books, when and how punishable ................................... 29 64. Debts incurred by breach of trust, recklessness or extravagance, how far punishable ............. 30 65. Administration of debtor’s estate after order absolute .............................................................. 30 PART XII - Bankruptcy Proceedings Against Estate Of A Deceased Debtor 66. Proceedings in bankruptcy against estate of a deceased debtor .............................................. 30 PART XIII - Discharge Of A Bankrupt 67. Report of Trustee, its purport ................................................................................................... 32 68. Consideration of application for discharge and dealing with same............................................ 32 69. Appeal ..................................................................................................................................... 35 70. Conditions of discharge ........................................................................................................... 36 71. How far order of discharge releases debtor from his debts ...................................................... 36 72. Order of discharge does not release partner or joint debtor...................................................... 36 73. How order of discharge pleaded and proved ............................................................................ 36 PART XIV - Administration Of A Debtor’s Estate By The Trustee 74. Estate of debtor to be administered for the benefit of his creditors ........................................... 37 75. Trustee to take possession of debtor’s property ....................................................................... 37 76. Trustee to recover debts .......................................................................................................... 37 77. Trustee to examine debtor’s books .......................................................................................... 37 78. Power of Trustee to sell property ............................................................................................. 37 79. How far Trustee may carry on debtor’s trade ........................................................................... 37 c Revised as at 2nd day of September, 1997. Page 5 Arrangement of Sections Bankruptcy Law 80. Trustee’s power to bring or defend actions .............................................................................. 37 81. Trustee may recover dividends ................................................................................................ 38 82. Trustee’s power to arbitrate or compromise claims of debtor ................................................... 38 83. Trustee’s power to compromise claims against debtor ............................................................. 38 84. Trustee’s power to compromise claims as to debtor’s property ................................................ 38 85. Powers of Trustee as to exercising discretion or executing deeds ........................................... 38 86. Trustee’s power as to estates tail ............................................................................................. 38 87. Proof of debts .......................................................................................................................... 38 88. Trustee under control of the Court ........................................................................................... 38 89. Trustee may ask the Court for directions.................................................................................. 38 90. Trustee acting under such directions protected ........................................................................ 39 91. Trustee to keep books ............................................................................................................. 39 92. Money received to be deposited in Government Savings Bank ................................................ 39 93. All moneys to be paid into Court after two years ...................................................................... 39 94. Audit of Trustee’s accounts ...................................................................................................... 40 PART XV - Control Of The Court Over The Administration Of The Debtor’s Estate By The Trustee 95. Trustee responsible to the Court .............................................................................................. 40 96. Power of Court to examine Trustee and his books ................................................................... 40 97. Power of Court to control Trustee ............................................................................................ 40 98. Appeal to the Court of Appeal against Trustee ......................................................................... 41 99. Power of Court to enable any person to do acts for the debtor ................................................. 41 PART XVI - Distribution Of Property Of Debtor 100. What the property of the debtor comprises .............................................................................. 41 101. Appropriation of portion of salary of debtor payable by Government ........................................ 42 102. Appropriation of portion of other salary or income .................................................................... 42 103. Delivery to Trustee of moneys and securities of debtor ............................................................ 42 104. Transfer of stocks, shares, etc. ................................................................................................ 42 105. Onerous and unprofitable property of debtor; power of Trustee to disclaim same; effect of disclaimer ................................................................................................................................ 43 106. Limit to Trustee’s right to disclaim ............................................................................................ 44 PART XVII - Benefit Of Transactions Affecting The Debtor And His Property 107. Settlement by debtor, how far void as against Trustee ............................................................. 44 108. Extension of power to avoid certain voluntary settlements, etc., as against the representatives of deceased settlers whose estates are insolvent ........................................... 45 109. Voluntary expenditure of moneys on the property of another to be deemed a settlement if order in bankruptcy takes effect within two years against the person so expending the same ....................................................................................................................................... 46 110. Bankruptcy of a firm or of one or more partners, effect thereof on the partnership assets and on the property of each partner ......................................................................................... 46 111. Fraudulent preferences ............................................................................................................ 47 112. Conveyance, assignment, etc., of stock-in-trade, etc. .............................................................. 47 113. Entry of vacatur on margin of record of deed declared void ..................................................... 47 Page 6 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Arrangement of Sections 114. Proceeds of executions against debtor .................................................................................... 47 115. Delivery of goods taken in execution but not sold..................................................................... 48 116. How far creditor entitled to benefit of execution or attachment against debtor .......................... 48 117. Distress for rent, landlord’s rights ............................................................................................. 48 118. Protection of certain bona fide transactions with bankrupt before petition filed ......................... 48 PART XVIII - Debts Provable Against The Debtor’s Estate 119. What debts are and what are not provable against debtor’s estate .......................................... 49 120. Estimate of debts of uncertain value ........................................................................................ 49 121. Liability defined ........................................................................................................................ 50 122. Interest on debts ...................................................................................................................... 50 123. Interest on debts, how calculated ............................................................................................. 50 124. Postponement of husband’s and wife’s claims ......................................................................... 51 125. Secured creditors, how they may prove ................................................................................... 51 126. Proofs in respect of distinct contracts in different capacities ..................................................... 51 127. Mutual dealings and set off ...................................................................................................... 52 128. Landlord may prove for residue of rent not recoverable by distress .......................................... 52 129. Proving for proportion of rent to date of provisional order ......................................................... 52 PART XIX - Distribution Of Assets And Dividends 130. Notice of dividend .................................................................................................................... 52 131. Calculation and distribution of dividend .................................................................................... 52 132. Rights of creditors who prove after dividend............................................................................. 53 133. Final dividend, notice thereof ................................................................................................... 53 134. How dividend recoverable if not paid ....................................................................................... 53 PART XX - Rules As To Priority Of Payment 135. Preferential debts .................................................................................................................... 53 136. Creditors of a debtor’s firm postponed to separate creditors of debtors .................................... 54 137. Allowances to debtor for support or services ............................................................................ 54 138. Surplus of estate payable to debtor .......................................................................................... 54 PART XXI - Unclaimed Bankrupt Estates 139. When moneys of insolvent estate remain in Treasury for twenty years Financial Secretary to report to Governor ............................................................................................................... 54 140. Advertisement in Gazette and newspaper ................................................................................ 55 141. Unclaimed funds to become general revenues of the Islands ................................................... 55 142. Action for money claimed to be against the Governor .............................................................. 55 PART XXII - Joint Debtors 143. Petition against partners or joint debtors .................................................................................. 56 144. Dismissal of petition against some respondents only ............................................................... 56 145. Power to extend provisional order against partners to their separate estate ............................. 56 146. Creditor of partners may prove for certain purposes his claims in proceedings against one partner ..................................................................................................................................... 56 c Revised as at 2nd day of September, 1997. Page 7 Arrangement of Sections Bankruptcy Law 147. Trustee’s right of action when debtor is a member of a firm ..................................................... 56 148. As to debtor’s joint contracts .................................................................................................... 57 149. Provisional order when a member of a firm is absent or of unsound mind ................................ 57 PART XXIII - Discovery Of Debtor’s Property 150. Power of Court to summon debtor and other persons, to require production of documents as to debtor’s affairs ................................................................................................................ 57 151. Examination of witnesses ........................................................................................................ 58 152. Court may order payment of admitted debt .............................................................................. 58 153. Power to seize debtor’s property, and to search for same ........................................................ 58 154. Arrest of debtor in certain events ............................................................................................. 58 155. Dealing with letters addressed to debtor .................................................................................. 59 PART XXIV - Orders And Warrants Of Court 156. Enforcement of warrants and orders of Courts ......................................................................... 59 157. Warrants of Bankruptcy Court .................................................................................................. 59 158. Committal to prison .................................................................................................................. 60 PART XXV - Evidence 159. Certified copies of entries in Trustee’s books ........................................................................... 60 160. Signature of Trustee ................................................................................................................ 60 161. Evidence of documents in proceedings under this Law ............................................................ 60 162. Depositions of deceased persons ............................................................................................ 60 163. Gazette notice conclusive evidence of certain facts ................................................................. 60 PART XXVI - Legal Proceedings 164. Service on Trustee .................................................................................................................. 61 165. Notice of action against Trustee ............................................................................................... 61 166. Exemptions from stamp duty ................................................................................................... 61 167. Irregularities not to invalidate proceedings ............................................................................... 61 168. Action in respect of debtor’s things in action assigned ............................................................. 61 PART XXVII - Apprenticeship 169. Discharge of indenture of apprentice of debtor and preferential allowance thereon .................. 62 PART XXVIII - Annulling Or Revoking Of Orders In Bankruptcy 170. Power to revoke orders, etc., effect thereof .............................................................................. 62 171. Effect of revocation of a provisional order ................................................................................ 62 PART XXIX - Offences 172. Offences .................................................................................................................................. 63 173. Undischarged bankrupt obtaining credit to extent of forty dollars without informing creditor of his bankruptcy guilty of an offence ....................................................................................... 65 Page 8 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Arrangement of Sections c Revised as at 2nd day of September, 1997. Page 9 Bankruptcy Law (1997 Revision) Section 1 CAYMAN ISLANDS BANKRUPTCY LAW (1997 Revision) ENACTED by the Legislature of the Cayman Islands. PART I - Introductory 1. Short title 1. This Law may be cited as the Bankruptcy Law (1997 Revision). 2. Definitions 2. In this Law — “bankruptcy petition” or “petition” means a petition praying that the affairs of the debtor may be wound up, and his property administered, under the provisions of the law of bankruptcy; “Court” means the Chief Court of Bankruptcy; “Court of Appeal” has the meaning ascribed to it in the Court of Appeal Law (1996 Revision); “creditors” include any two or more persons to whom a debt is owing jointly; “debtor” includes any person, whether a British subject or not, who at the time when any act of bankruptcy was done or suffered by him — (a) was personally present in the Islands; (b) ordinarily resided or had a place of residence in the Islands; c Revised as at 2nd day of September, 1997. Page 11 Section 3 Bankruptcy Law (c) was carrying on business in the Islands, personally or by means of an agent or manager; or (d) was a member of a firm or partnership which carried on business in the Islands; “deed of arrangement” means a deed or instrument providing by way of trust, inspectorship or otherwise, for the distribution of all or part of the property of a debtor among all his creditors, and for the payment of a composition to all his creditors out of his property or otherwise; “person” includes a body corporate and a firm; “prescribed” means prescribed by rules of Court; “property” includes money, goods, things in action, land and every description of property real or personal, also obligations, easements and every description of estate, interest and profit, present or future, vested or contingent, arising out of or incident to property as above defined; “secured creditor” means any person holding a mortgage, charge or lien upon the property of the debtor as security for a debt due to him from such debtor; and “Trustee” means the Trustee in Bankruptcy, whether acting as receiver or Trustee. PART II - Constitution And Jurisdiction Of Court 3. Chief Court of Bankruptcy 3. (1) The Grand Court is the Chief Court of Bankruptcy. (2) The Judges of the Grand Court are the Judges of the Chief Court of Bankruptcy. (3) The Clerk and officers of the Grand Court, and such other clerks and officers as may be appointed, are the clerks and officers of the Chief Court of Bankruptcy. (4) The Chief Court of Bankruptcy is a court of law and of equity, and a principal court of record, and, for the purposes of this Law, has all the powers and jurisdiction of the Grand Court. (5) The Judges of the Chief Court of Bankruptcy have, for the purposes of this Law, all the powers, jurisdiction and privileges of the Judges of the Grand Court; and the orders of such Judges have the same force as if they were judgments of the Grand Court. (6) The Clerk and other officers of the Chief Court of Bankruptcy in proceedings in bankruptcy, have the same powers, duties and responsibilities that they have Page 12 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 4 in proceedings within the ordinary jurisdiction of the Grand Court, and such further powers, duties and responsibilities as may be assigned to them by a Judge of the Chief Court of Bankruptcy, for the purposes of this Law, under rules of Court. (7) The Judges may carry on the business of the Chief Court of Bankruptcy, except in cases of appeal. (8) The Judges of the Chief Court of Bankruptcy may sit in Chambers, and when in Chambers have the same jurisdiction and exercise the same powers as if in Court. 4. Proceedings in bankruptcy 4. All proceedings in bankruptcy shall be commenced by petition in the Chief Court of Bankruptcy. 5. Powers of Court to decide all questions 5. Subject to this Law, the Court has full power to decide all questions of priorities, and all other questions whatsoever, whether of law or of fact, arising in any case of bankruptcy coming within the cognizance of such Court, or which such Court may deem it expedient or necessary to decide for the purpose of doing complete justice or making a complete distribution of property in any such case; and the Court is not subject to be restrained in the exercise of its powers under this Law by the order of any other Court, nor does any appeal lie from the decisions of the Court, except in the manner directed by or under the authority of this Law. 6. Sittings in Court 6. (1) The Court may hold sittings periodically at the Court House of the Grand Court in Grand Cayman at such times as may be determined by the Judges, and may, in addition, hold such special sittings as to such Court shall seem expedient. (2) It is lawful for a Judge of the Court to hear any matter or proceeding in bankruptcy within the original jurisdiction of such Court either with or without a jury. 7. Trial of questions of fact by jury 7. If, in any proceedings in bankruptcy before the Court, there arises any question of fact which the Court thinks ought to be tried before a jury, it may direct such trial to be had accordingly. 8. Court may vary orders 8. The Court may review, rescind or vary any order made by it under this Law. c Revised as at 2nd day of September, 1997. Page 13 Section 9 Bankruptcy Law 9. Appeals 9. (1) Any person aggrieved by any order of a Judge of the Court in respect of a matter of fact or of law, may appeal to the Court of Appeal, and it shall be lawful for such Court to alter, reverse or confirm any such order as it sees fit, and if the order be in respect of a matter of fact, to direct the rehearing of such matter of fact by the Court, with or without a jury, in such manner and on such terms as it sees fit; but no appeal shall be allowed from any order relating to a matter of fact unless the amount is not less than four hundred dollars. (2) The judgment of the Court of Appeal upon appeal is final, subject only to the right of appeal to Her Majesty in Council. (3) An appeal from Chambers shall be made in the same way as an appeal from an order in Court. 10. Powers as to costs 10. The Court may make any such order regarding the costs of proceedings pending before it as it sees fit. 11. Fees, how fixed, payable and applicable 11. (1) The fees to be charged for any business done under this Law shall be according to a scale to be prescribed by the Governor in Council, who shall have power to direct by whom and in what manner the same shall be collected, accounted for and appropriated. (2) The Governor in Council may, at any time, alter the amount of any of the fees prescribed under this Law, and notice of such alteration shall be gazetted, and the scale so altered shall come into operation at such time as may be specified in such notice. PART III - Trustee In Bankruptcy 12. Trustee in Bankruptcy *See note on page 58 12. The Governor may, from time, appoint an officer to be called “Trustee in Bankruptcy” who shall be attached to the Court and shall administer the estates of debtors in bankruptcy subject to this Law, and any law relating to bankruptcy. 13. Power to appoint agents, etc. 13. (1) The Trustee may, on such terms as to remuneration and otherwise as may be prescribed, and with the approval of the Court, appoint a proper person to act as his agent in respect of any estate vested in or administered by him under this Law, or in respect of any part of the business thereof. Page 14 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 13 (2) No change of the Trustee shall affect any estate or trust vested in or administered by the Trustee, but such estates and trusts shall vest in or be administered by the succeeding Trustee, who shall hold the same position with regard to such estates and trusts as the former Trustee held. (3) No proceedings pending on a change of the person holding the office of Trustee shall be affected by such change, but may be continued by and against the succeeding Trustee without suggestion, revival or other similar proceeding. (4) The Trustee shall be entitled to a commission of five per cent on all dividends of any estate or trust paid by him in the administration of a bankrupt’s estate under an absolute order for bankruptcy under this Law, and a commission of five per cent on all dividends of any estate or trust paid by him (or sanctioned by the Court) in the administration of a debtor’s estate under a deed of arrangement under this Law. (5) Such remuneration shall be for the time and responsibility of the Trustee in the general administration of the estate or trust, and the estate or trust shall not be subject to any other charge in respect thereof, but any expenses in respect of any other matters, including travelling expenses relating to any estate or trust, may be charged against the estate or trust in such manner and to such extent as may be prescribed or specially sanctioned or allowed by the Court. (6) The word “dividends”, as used in subsection (4), which provides that the Trustee shall be entitled to a commission on all dividends of any estate or trust paid by him, shall be deemed to include and to have included all sums of money paid by the Trustee out of the net amount realised of any such estate or trust in satisfaction in whole or in part of any debt or liability of the bankrupt or debtor: Provided that nothing herein contained shall entitle the Trustee to recover from any creditor of any such bankrupt or debtor any sum of money which he has paid to him and which, under this Law he would have been entitled to retain. (7) The Trustee shall be entitled to recover, as a first charge on every estate or trust or the proceeds thereof, all auctioneer’s fees and charges and other similar expenses (the same having been duly taxed by the Clerk of the Court) paid by him in and about the realisation of any estate under this Law. (8) The Trustee’s office is in Grand Cayman. c Revised as at 2nd day of September, 1997. Page 15 Section 14 Bankruptcy Law PART IV - Proceedings On A Bankruptcy Petition 14. Who may be petitioning creditors, and acts of bankruptcy 14. A single creditor or two or more creditors, if the debt owing to such single creditor or the aggregate amount of debts owing to such several creditors from any debtor amounts to not less than forty dollars, may present a bankruptcy petition to the Court against a debtor, alleging as the grounds of the petition any one or more of the following acts or defaults, in this Law deemed to be and included under the expression “acts of bankruptcy” — (a) that the debtor has, in the Islands or elsewhere, made a conveyance or assignment of his property to a trustee or trustees for the benefit of his creditors generally, or has executed any other instrument whereby his property is made available for general distribution amongst his creditors; (b) that the debtor has, in the Islands or elsewhere, made a fraudulent conveyance, gift, delivery or transfer of his property or any part thereof; (c) that the debtor has, with intent to defeat or delay his creditors, departed out of the Islands, being out of the Islands remained out of the Islands, departed from his dwelling-house, otherwise absented himself, begun to keep house or begun to sell his stock-in-trade at an under-value; (d) that the debtor has, by any act, declared himself unable to meet his engagements; (e) that the debtor has presented a bankruptcy petition against himself; (f) that execution issued in the Islands against the debtor on any legal process for the obtaining payment of any sum of money has been levied by seizure and sale of his goods, or enforced by delivery of his goods; (g) that the creditor presenting the petition has served on the debtor a summons in an action in the Grand Court wherein the creditor claims payment of a liquidated sum of not less than forty dollars, and has also served on the debtor in the Islands in the prescribed manner, at or at any time after the date of the service of the summons, a bankruptcy notice in writing, in the prescribed form, requiring him to pay the amount endorsed upon such summons, and the debtor has not, within seven days after the service of such notice, paid the amount due to the creditor, or secured or compounded for the same to the satisfaction of the creditor: Provided that no bankruptcy petition shall be presented on this ground unless the creditor has obtained final judgment in the action for not less than forty dollars within three months from the service of the summons; (h) that the creditor presenting the petition has obtained final judgment against the debtor in an action in the Grand Court for not less than forty dollars, and has served on the debtor in the Islands a bankruptcy notice in writing, in the prescribed manner and form, requiring him to pay the Page 16 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 14 amount for which such judgment has been obtained, and the debtor has not, within seven days after the service of notice, paid such amount, or secured or compounded for the same to the satisfaction of the creditor; (i) that the creditor presenting the petition, having a demand against the debtor of not less than forty dollars upon a negotiable security for money upon which the debtor was primarily liable, and upon which payment was at least fourteen days overdue, served on the debtor in the Islands a bankruptcy notice in writing, in the prescribed manner and form, requiring him to pay the amount of such debt and that the debtor has not, within seven days after the service of such notice, paid such amount or secured or compounded for the same to the satisfaction of the creditor; (j) that the debtor has, in the Islands or elsewhere, made any conveyance or transfer of his property or any part thereof, or created any charge thereon, which would under any law relating to bankruptcy, be void as a fraudulent preference if he were adjudged bankrupt; (k) that the debtor has, in the Gazette and in a newspaper circulated in the Islands, given notice of his intention to convey, assign or transfer his stock-in-trade, debts or things in action relating to his business to any other person; and that the creditor presenting the petition, having a demand against the debtor of a liquidated sum of not less than forty dollars, has served on the debtor in the Islands a bankruptcy notice in writing, in the prescribed manner and form, requiring him to pay the amount of such debt, and that the debtor has not, within seven days after the service of such notice, paid such amount or secured or compounded for the same to the satisfaction of the creditor; or (l) that the debtor has paid money to or given or delivered any satisfaction or security for the debt of a petitioning creditor, or any part thereof, after such creditor has presented a bankruptcy petition against him: Provided that — (i) the alleged act of bankruptcy must have occurred within six months before the presentation of the petition; (ii) the debt of the petitioning creditor must be a liquidated sum due or growing due at law or in equity, and must not be a secured debt unless the petitioner states in his petition that he will be ready to give up such security for the benefit of the creditors in the event of a provisional order being made, or unless the petitioner gives an estimate of the value of the security, in which latter case he may be admitted as a petitioning creditor to the extent of the balance of the debt due to him after deducting the value so estimated, but he shall, on an application being made in the course of the proceedings within the prescribed time by any person interested, give up his c Revised as at 2nd day of September, 1997. Page 17 Section 15 Bankruptcy Law security to be dealt with as part of the property of the debtor for the benefit of the creditors upon payment of such estimated value; (iii) any person who is, for the time being, entitled to enforce a final judgment shall be deemed a creditor who has obtained a final judgment within the meaning of this section; and (iv) where any debtor is absent from the Islands, any act done or suffered by any agent or manager of the debtor managing any property, or engaged in carrying on any business of the debtor in the Islands, which, if such agent or manager were the owner of the property or business, would have constituted an act of bankruptcy available against such person, shall, in all cases, be deemed to have been expressly authorised by the debtor and shall be available as an act of bankruptcy against the debtor unless the authority of the agent or manager shall be shown to have been exceeded. 15. Debtor’s petition 15. A debtor may present a bankruptcy petition against himself without alleging any grounds. 16. Creditor’s petition, how to be verified 16. Every petition presented by a creditor shall be accompanied by an affidavit of the petitioner in the prescribed form verifying the statements contained in such petition. 17. Debtor’s petition, what statement to accompany same 17. (1) Every petition presented by a debtor shall be accompanied by a statement verified in the prescribed manner of the debtor’s property, his debts and liabilities, his creditors, and of the value and dates of the securities held by them, and of the dates when such securities were actually given, together with a general statement of the profits, losses and expenses of any business in which he may have been engaged during the twelve months preceding the presentation of the petition, and a memorandum explanatory of the causes of his insolvency. (2) No petition by a debtor against himself shall be received unless accompanied by the statement required by subsection (1), nor shall any order be made on any such petition unless a copy thereof shall have been served on the Trustee, and the Trustee, admitting such service, shall apply for such order. Any order made on such petition shall be an absolute order. Page 18 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 18 PART V - Appointment Of Receiver 18. Appointment of Receiver; his powers and duties 18. At any time after a petition has been filed the Court may order that the Trustee become the receiver or manager of the property or business of the debtor, or of any part thereof, and the Trustee shall thereon enter upon and act in the performance of his office in relation to such property or business at such time, and in such manner and to such extent, as the Court may, from time to time direct, and if directed by the Court, and so far as the nature of the case will admit, do anything which might be done by a Trustee after an absolute order for bankruptcy under this Law, and shall, in relation to and for the purpose of acquiring or retaining possession of the property of the debtor, and in addition to any powers given to him by this Law, be in the same position in all respects as if he were a receiver appointed by the Grand Court, and the Court may, on his application, enforce such acquisition and retention accordingly. PART VI - Parties To Proceedings Under A Petition 19. Companies may proceed by agent 19. A company or other body incorporate or authorised to sue, may present a petition and act in any proceedings thereon by an agent duly authorised on its behalf. 20. Firms may be named by their style 20. Any two or more persons, being partners, may take proceedings or be proceeded against under this Law in the name of their firm, but in such case the Court may, on application by any person interested, order the names of the persons who are partners in such firm to be disclosed in such manner, and verified on oath or otherwise, as the Court may direct. 21. Special provision as to certain companies 21. A provisional order or deed of arrangement under this Law shall not be made against or by any partnership association or company corporate or registered under the Companies Law (1995 Revision). c Revised as at 2nd day of September, 1997. Page 19 Section 22 Bankruptcy Law PART VII - Consolidating, Staying, Adjourning, Continuing And Dismissing Proceedings Under A Petition 22. Consolidating petitions against partners separately 22. Where a petition is presented against a member of a partnership whilst bankruptcy proceedings are pending on a petition against another member of the same partnership, the Court may give such directions for consolidating the proceedings under the petitions as it thinks just. 23. Consolidating petitions against same debtor 23. When two or more bankruptcy petitions are presented against the same debtor or against joint debtors, the Court may consolidate the proceedings, or any of them, upon such terms as the Court thinks fit. 24. Staying proceedings 24. The Court may, at any time, for sufficient reasons, make an order staying proceedings under a petition, either altogether or for a limited time, on such terms and subject to such conditions as the Court thinks just. 25. Adjourning and dismissing petitions 25. The Court may adjourn any petition, either conditionally or unconditionally, for the procurement of further evidence or for any other just cause, or may dismiss the petition with or without costs as it thinks just. 26. Substitution of other creditor as petitioner in case of delay 26. Where a petitioner does not proceed with due diligence on his petition, the Court may substitute as petitioner any other creditor to whom the debtor may be indebted in the amount required by this Law in the case of a petitioning creditor. 27. Proceedings continued though debtor dies 27. When a debtor by whom a petition has been presented or against whom a provisional order has been made dies, the proceedings shall be continued as if he were alive. PART VIII - Provisional And Absolute Orders For Bankruptcy 28. Notice of petition need not be served 28. It shall not be necessary to serve a petition or any notice thereof on the debtor. Page 20 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 29 29.

Provisional order, when to be made 29. As soon as may be after the presentation of a petition, the Court, if satisfied by ex parte evidence or otherwise in the case of a creditor’s petition of the petitioning creditor’s debt and of the act or of one of the acts of bankruptcy alleged, shall make on the petition an order, in this Law referred to as a “provisional order”, that the affairs of the debtor shall be wound up and his property administered under the law of bankruptcy. 30. Service of provisional order 30. Where a provisional order is made on a creditor’s petition, a copy of the order shall be served on the debtor in the prescribed manner, together with a notice that within a specified number of days the debtor may show cause why the provisional order should be revoked. 31. Revocation of provisional order 31. If the debtor, within the time appointed, shows to the satisfaction of the Court that either the proof of the petitioning creditor’s debt, or of the act of bankruptcy, is insufficient and if upon such showing no other sufficient petitioning creditor’s debt or act of bankruptcy is proved, or if any ground is shown to exist which would render the making of a provisional order inequitable, the Court shall revoke the provisional order and, unless it sees good cause to the contrary, shall order costs to be paid to the debtor. 32. Order for debtor to file statement of his affairs, and service thereof 32. If the provisional order is not so revoked, an order shall be served on the debtor, in the prescribed manner, requiring him to file in the Court within the specified number of days after the date of the service of the order, a statement verified in the prescribed manner, and containing the particulars specified in section 17, and giving notice that if he does not do so the provisional order may, on the application of a creditor, be made an absolute order for bankruptcy, and that the bankruptcy will be gazetted. 33. Absolute order for bankruptcy 33. If the debtor fails to comply with the order, or to show a sufficient excuse for not having complied with it, the Court may, on the application of any creditor, make an absolute order for bankruptcy against the debtor and direct such bankruptcy to be gazetted. 34. Effect of order as to staying proceedings to recover debts 34. (1) When a provisional or an absolute order has been made against a debtor, no creditor to whom the debtor is indebted, in respect of any debt provable in bankruptcy, shall have any remedy against the property or person of the debtor in respect of such debt, except in manner directed by this Law. c Revised as at 2nd day of September, 1997. Page 21 Section 35 Bankruptcy Law (2) All proceedings to recover any such debt shall, if not already stayed, be stayed upon notice of such order being given in manner prescribed, but the Court may, on application by any creditor or person interested, allow any proceedings commenced to be continued upon such terms and conditions as it thinks just. (3) Subsections (1) and (2) shall not affect the power of any secured creditor to realise or otherwise deal with his security in the same manner as he would have been entitled to realise or deal with the same if this section had not been passed. 35. Relation back to provisional order 35. The effect of the provisional order shall be deemed to have relation back to and to commence at the time of the act of bankruptcy being completed on which the provisional order is made, hereinafter referred to as “the commencement of the bankruptcy”, or, if the debtor is proved to have committed more acts of bankruptcy than one, to have relation back and to commence at the time of the first of the acts of bankruptcy proved to have been committed by the debtor within six months next preceding the date of the presentment of the petition; but the effect of the provisional order shall not relate to any act of bankruptcy prior to the one on which such order is made, unless at the time of committing such prior act the debtor was indebted to some creator or creditors in a sum or sums sufficient to support a petition, and unless such debt or debts are still remaining due at the date of the provisional order. 36. Debtor’s property, when and how divisible 36. When a provisional order has been made against a debtor, his property shall become divisible amongst his creditors in proportion to the debts provided by them. 37. Debtor’s property, when it vests in Trustee, and when and how to be administered 37. When a provisional order has been made against a debtor, the property of the debtor shall immediately pass to and vest in the Trustee, without any conveyance, assignment or transfer whatever, to be by him in due course, either under an absolute order for bankruptcy, or under a deed of arrangement as hereinafter provided by this Law, realised, administered and distributed with as much despatch as is reasonably practicable for the benefit of the creditors. 38. Duty of Trustee 38. Until the provisional order is made absolute, it shall be the duty of the Trustee, as far as the nature of the property seized permits, to preserve all such property in such state as to permit of its being returned to the debtor in the condition in which it was when it was seized, in the event of the revocation of the provisional order: Page 22 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 39 Provided that the Trustee may, before any such order is made absolute, make sales of any part of the debtor’s stock-in-trade or other property, and take such other action in the interests of the debtor’s estate, as in the ordinary course of the debtor’s business may seem expedient. 39. Duty of debtor to aid Trustee 39. When a provisional or an absolute order has been made against a debtor, it shall become the duty of the debtor to the utmost of his power, so far as he may be required, to aid in the realisation of his property, and the distribution of the proceeds amongst his creditors, and subject to this Law to submit to such examinations in respect of his property or his creditors as the Trustee or the Court may require, and to execute such powers of attorney, conveyances, deeds and instruments, and generally to do all such things in relation to his property and the distribution of the proceeds amongst his creditors, as the Trustee or Court may reasonably require or as may be prescribed. 40. When debtor punishable as for a contempt of Court 40. If the debtor wilfully fails to perform any of the duties imposed on him by this Law, or if he fails to deliver up possession of any part of his property, which is divisible amongst his creditors under this Law, and which may, for the time being, be in his possession or control, to the Trustee or any person authorised by the Court to take possession thereof, he shall, in addition to any other punishment to which he may be subject, be guilty of a contempt of Court and may be punished accordingly. PART IX - Meeting Of Creditors And Resolutions 41. Meeting of creditors, when to be summoned 41. The Court shall, as soon as practicable after the provisional order, summon a general meeting of the creditors of the debtor; but if under any of the foregoing provisions an absolute order for bankruptcy has been made against the debtor before the day appointed for such meeting, the meeting shall not be held. 42. Meeting, how to be held and conducted, and as to voting thereat 42. The meeting shall be held in the prescribed manner and subject to the prescribed regulations as to the quorum of creditors, adjournment of meeting and all other matters relating to the conduct of the meeting or the proceedings thereat: Provided that — (a) a person shall not be entitled to vote as a creditor unless he has, in the prescribed manner, proved a debt that is due to him; (b) a creditor shall not vote in respect of any unliquidated or contingent debt, or any debt the value of which is not ascertained; c Revised as at 2nd day of September, 1997. Page 23 Section 43 Bankruptcy Law (c) a secured creditor shall, for the purpose of voting, be deemed to be a creditor only in respect of the balance, if any, due to him after deducting the value of his security; and the amount of such balance shall, until the security is realised, be determined or assessed in the prescribed manner. He may, however, give up or abandon the security, and thereupon he shall rank as a creditor in respect of the whole sum due to him; (d) a creditor shall not vote in respect of any current bill of exchange or promissory note held by him under discount, unless he is willing to treat the liability of every person who is liable thereon antecedently to the debtor, and whose estate is not in course of administration under this Law, as security in his hands, and to estimate the value thereof and deduct the same from his proof, in which case he shall on application being made within the prescribed time by any person interested, give up such security for the benefit of the creditors of the debtor upon payment of such estimated value: Provided that such estimate (except so far as the creditor may receive any payment as aforesaid in respect thereof) shall not prejudice the right of such creditor to receive from the estate of the debtor a dividend upon the whole amount of such bill or not; and (e) votes may be given either personally or by proxies as may be prescribed. 43. Duty and power of Trustee at meeting 43. The Trustee shall attend the meeting, and shall receive and decide upon proof of debts in the prescribed manner, and insofar as it may be necessary for determining the right of voting at such meeting. 44. Resolutions at meeting 44. At the meeting the creditors may, by the votes of a majority in value of the creditors present, personally or by proxy resolve — (a) that the proceedings under the petition be stayed, the affairs of the debtor wound up and his property administered under a deed of arrangement, the nature of which may or may not be specified in the resolution; or (b) that adjudication of bankruptcy be made, and may also resolve at their discretion, that a creditor to be named at such meeting shall be associated with the Trustee to assist and advise the Trustee in the administration of the debtor’s estate, but the appointment of such creditor shall not affect the responsibility of the Trustee; and a creditor so appointed shall receive out of the debtor’s estate such remuneration for his services as the Court may think fit. Page 24 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 45 45. Report to the Court as to resolutions 45. (1) The resolutions come to shall be filed with the proceedings and reported by the Trustee to the Court. (2) The Trustee shall also report to the Court in case no meeting is held or no resolution come to. 46. Procedure on resolution for deed of arrangement 46. If the resolution is that the proceedings under the petition be stayed, the Court shall make an order that the proceedings be stayed accordingly for such time as may be necessary to obtain the confirmation of a deed of arrangement as hereinafter provided, and such order may be made on such terms and subject to such conditions as the Court may think just. 47. Absolute order for bankruptcy, when to be made 47. If no meeting is held, no resolution is come to or if the resolution is that adjudication of bankruptcy be made or it is shown to the satisfaction of the Court that there is no reasonable probability of the confirmation of deed of arrangement and that delay will not be for the benefit of the creditors, the Court shall make an absolute order or bankruptcy against the debtor. PART X - Proceedings Under An Order For A Deed Of Arrangement 48. Deed of arrangement, how made, executed, proved and filed 48. Where an order is made that proceedings in bankruptcy against a debtor be stayed for such time as may be necessary to obtain the confirmation of a deed of arrangement, a deed may be entered into between a debtor and his creditors, subject to the following provisions — (a) the deed must be assented to by a majority in number representing seventy-five per cent in value of the creditors of the debtor, and no creditor shall be reckoned in such majority unless he has proved his debt in manner prescribed; and the assent of a creditor shall be testified by his signing the deed of arrangement, or some document in a form prescribed for that purpose; (b) the deed shall be acknowledged or proved in the manner provided by the Property (Miscellaneous Provisions) Law, 1994 [Law 7 of 1994]; (c) when the deed has been executed by the debtor an attested copy thereof shall be filed in the Court; and (d) there shall be filed with the deed — c Revised as at 2nd day of September, 1997. Page 25 Section 49 Bankruptcy Law (i) a list showing the debts and liabilities of the debtor, the time when the same were contracted or incurred and the considerations for the same, the names, residences and occupations of his creditors, the respective amounts due to them, all securities held by them and the date when such securities were respectively given; (ii) a detailed statement of his debts and property, and the estimated value thereof; and (iii) an affidavit in the prescribed form by the debtor, or some person able to depose thereto, verifying such list and statement, and such list or statement may, from time to time, be amended by leave of the Court, and every such amendment shall be in like manner verified by affidavit. 49. Consideration of deed by the Court 49. At the time appointed for the confirmation of the deed, the Court shall, on the application of any creditor of the debtor, take the deed into consideration. 50. Conditions for confirmation 50. (1) No deed of arrangement shall be taken into consideration by the Court until the debtor has submitted himself to the public examination of the Court, and the Trustee has made a report to the Court under section 67; and no such deed shall be confirmed by the Court unless, on a consideration of the report as aforesaid, it appears to be in the interest of the creditors generally that it should be confirmed. (2) All applications to confirm any deed as aforesaid shall be made to the Judge before whom the public examination of the debtor was held, save as in section 68(1) provided in cases where the services of such Judge are not available. 51. Proceedings when deed is not confirmed 51. If there is no application to the Court to consider the deed, if no deed has been filed or if the Court does not confirm the deed, the Court shall order that the proceedings in bankruptcy shall forthwith continue from the point at which they were stayed, or, if it thinks fit, may order the adjournment of the consideration to allow time for the execution of the deed or another deed. 52. Proceedings on confirmation of deed 52. If, upon the consideration of the deed, the Court is satisfied that the requirements of this Law have been complied with it may, in its discretion, by order, confirm the deed, and may make such order as to the further staying of any proceedings or the annulling of any provisional order under the petition, as it thinks fit. Page 26 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 53 53. Confirmation of deed conclusive as to its validity 53. The order of the Court confirming the deed shall be conclusive evidence of the validity of the deed, and after such order the deed shall not be liable to be impeached or disturbed in any court on the ground of anything being contained therein or omitted therefrom, or on any other ground whatsoever except in manner provided by this Law. 54. Administration of estate under confirmed deed 54. If the deed is confirmed it shall be binding on all creditors, and all questions under it shall be determined by the Court according to the law of bankruptcy and every creditor under the deed shall be entitled to be paid his debt or, as the case may be, a dividend or composition thereon ratably with the other creditors of the arranging debtor, but all creditors who would be entitled to priority of payment under an adjudication of bankruptcy against the arranging debtor shall be entitled to the like priority under the deed, and regard shall be had to the rule in bankruptcy as to the application of joint or separate estate in payment of creditors. 55. Discharge of debtor when deed carried out 55. (1) The Court may, at any time after the confirmation of the deed, make an order for the discharge of the debtor in accordance with the terms of the deed, or if there are no terms relating to discharge then upon the report of the Trustee that the arrangements under the deed have been fully carried out. (2) Such order shall, except insofar as may be otherwise expressly provided in this Law, have all the effect of an unconditional discharge of a bankrupt as hereinafter mentioned made upon proceedings after an absolute order for bankruptcy. 56. When deed may be declared void, and effect thereof 56. If, at any time after the confirmation of the deed, it appears to the Court the debtor has not acted in good faith in relation to the bankruptcy proceedings before or under the deed, is not assisting the Trustee to the utmost of his power to administer the estate in accordance with the terms of the deed or that for other reasons it is expedient or just, the Court may, by order, declare that the deed, so far as regards any release to the debtor therein contained or provided for, shall be void, and the deed shall accordingly be void to such extent, and the Court may, without any further condition, make an absolute order for bankruptcy against the debtor, which shall take effect from the time of the making thereof: Provided that no act done in pursuance of a deed which has been confirmed shall be impeached or disturbed by reason of any such order, and in the administration of the property of the debtor thereafter regard shall be had to all payments made in pursuance of the deed. c Revised as at 2nd day of September, 1997. Page 27 Section 57 Bankruptcy Law 57. Deeds of arrangement in cases of partners 57. This Part shall apply to any case in which members of a partnership enter into a deed of arrangement with their creditors under this Law, and any such deed of arrangement may be entered into with the joint creditors without any of the separate creditors being parties to or included in the deed, or with separate creditors without any of the joint creditors being parties to or included in the deed: Provided that in a distinct arrangement with any particular class of creditors the rule in bankruptcy respecting the application of joint or separate estate to the payment of creditors shall not be contravened. 58. Assent of certain creditors in cases of partners 58. Where a deed of arrangement is made by members of a partnership with their joint and separate creditors, any delay in obtaining, or failure to obtain, the assent of some or one of the classes of separate creditors shall not prevent the deed being confirmed so as to bind the joint creditors and any other class of separate creditors. 59. Debt incurred, increased or forborne, by means of fraud 59. Where a debtor who has executed a deed of arrangement has incurred or increased a debt or obtained forbearance thereof by fraud, he shall be liable to pay to the defrauded creditor the balance of such debt after deducting any sum or sums which may have been received by such creditor by way of composition or dividend under the deed, provided that such creditor has not assented to the deed in manner provided by this Law. 60. Rights of creditors against third parties not affected 60. No creditor of the arranging debtor, whether assenting to the deed or not, shall be prejudicially affected by this Part with respect to any right or remedy against any person other than the arranging debtor. 61. Administration of estate on confirmation of deed 61. When the deed of arrangement is confirmed, the Trustee shall proceed to administer the debtor’s estate so as to give full effect to the deed, and subject to this Law so far as the same may be applicable. Page 28 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 62 PART XI - Proceedings Under An Absolute Order For Bankruptcy 62. Examination of debtor, and into his affairs 62. (1) When an absolute order for bankruptcy has been made against a debtor the Court shall direct the adjudication to be gazetted, and shall direct a public sitting to be held on a day to be named for the purpose of examining into the affairs of the debtor, and the debtor shall attend at such sitting and submit himself to examination as to his conduct, dealings and property. (2) The sitting may be adjourned as often as the Court thinks fit, and the debtor shall attend at each adjourned meeting. (3) The Court may, at such sitting, take such evidence as it thinks necessary, and such evidence as may be tendered by the creditors, the Trustee or the debtor, or any of them. (3) For the purposes of the examination, the Court may take evidence viva voce, or by affidavit, interrogatories or commission, as it thinks fit. (5) When the Court is satisfied that the debtor’s affairs have been sufficiently investigated it may declare the examination finished. (6) On the public examination of the debtor under this section the debtor shall be examined upon oath, and it is his duty to answer all such questions as the Court may put or allow to be put to him. Such notes of the examination as the Court thinks proper shall be taken down in writing, and shall be read over to and signed by the debtor, and may thereafter be used in evidence against him; and they shall also be open to the inspection of any creditor at all reasonable times. 63. Omission to keep or produce proper books, when and how punishable 63. (1) If, at any time after an absolute order for bankruptcy has been made against a debtor, it appears to the Court that the debtor, having been engaged in any trading or other business, has not kept and produced proper books of account, papers or vouchers, by means of which the Trustee may be able to obtain a correct knowledge of his affairs, it may, if it thinks fit, order the debtor to be imprisoned in some convenient prison for any period not exceeding one year unless good cause is shown to the Court why such books, papers and vouchers have not been kept and produced. (2) If the books of account in this section required to be kept and produced have not been kept, written or printed in the English language, they shall not be deemed to be proper books of account within the meaning of this section, unless, for good cause shown by the debtor, the Court otherwise determines. c Revised as at 2nd day of September, 1997. Page 29 Section 64 Bankruptcy Law (3) For the purposes of this section a person shall be deemed not to have kept proper books of account if he has not kept such books or accounts as are necessary to exhibit or explain his transactions and financial position in his trade or business including a book or books containing entries from day to day in sufficient detail of all cash received and cash paid, and, where the trade or business has involved dealings in goods, also accounts of all goods sold and purchased and statements of annual stocktaking. 64. Debts incurred by breach of trust, recklessness or extravagance, how far punishable 64. If, at any time before an order of discharge is granted to a debtor, it appears to the Court that the debtor has incurred or contracted any debt by means of a breach of trust or without having had any reasonable or probable ground of expectation at the time when he incurred or contracted such debt of being able to pay the same, or that he has lived extravagantly or beyond his proper means, it may, if it thinks fit, order the debtor to be imprisoned in some convenient prison for any period not exceeding one year: Provided that, if in the opinion of the Court, the conduct of the debtor has rendered him liable to punishment for an offence under this Law, it may direct the prosecution of the debtor for such offence, and cause the Trustee to prepare a statement of the case for the conduct of the prosecution. 65. Administration of debtor’s estate after order absolute 65. When an absolute order for bankruptcy has been made against a debtor the Trustee shall proceed to administer the debtor’s estate for the benefit of the creditors subject to this Law. PART XII - Bankruptcy Proceedings Against Estate Of A Deceased Debtor 66. Proceedings in bankruptcy against estate of a deceased debtor 66. (1) Any creditor of a deceased debtor whose debt would have been sufficient to support a bankruptcy petition against such debtor, had he been alive may present to the Court a petition praying for an order for the administration of the estate of the deceased debtor according to the law of bankruptcy . (2) Upon notice being given to the legal personal representative of the deceased debtor, the Court may, upon proof of the petitioner’s debt, unless the Court is satisfied that there is a reasonable probability that the estate will be sufficient for the payment of the debts owing by the deceased, make an order for the administration in bankruptcy of the deceased debtor’s estate, or may upon cause shown dismiss such petition with or without costs. Page 30 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 66 (3) An order of administration under this section may be made at any time after the grant of probate or letters of administration. (4) A petition for administration under this section shall not be presented to the Court after proceedings have been commenced for the administration of the deceased debtor’s estate; but the Court in which such proceedings have been taken may, in any such case in which it is made to appear that the estate is insufficient to pay its debts, make an order for the administration of the estate of the deceased debtor in bankruptcy, and thereupon the like consequences shall ensue as under an administration order made on the petition of a creditor. (5) Upon an order being made under this section for the administration of a deceased debtor’s estate, the property of the debtor shall vest in the Trustee, and he shall forthwith proceed to realise and distribute the same in accordance with the laws of bankruptcy. (6) In the administration by the Trustee of the assets of any person pursuant to an order under this section, the Court shall, on the petition of the Trustee have and exercise all the powers which, in the case of administration of the assets by the Court, it would have, under section 108, on the petition of a creditor or creditors. (7) With the modifications hereinafter mentioned, all the provisions of this Law relating to the administration of the property of a bankrupt shall, so far as the same are applicable, apply to the case of an administration order under this section in like manner as to an order of adjudication under this Law. (8) In the administration of the property of the deceased debtor under an order made under this section, the Trustee shall have regard to any claim by the legal personal representative of the deceased debtor to payment of the proper funeral and testamentary expenses incurred by him in and about the debtor’s estate, and such claims shall be deemed a preferential debt under the order and be payable in full, out of the debtor’s estate, in priority to all other debts. (9) If, on the administration of a deceased debtor’s estate, any surplus remains in the hands of the Trustee, after payment in full of all the debts due from the debtor together with the costs of the administration and interest as provided by this Law in case of bankruptcy, such surplus shall be paid over to the legal personal representative of the deceased debtor’s estate, or dealt with in such other manner as may be ordered by the Court. (10) Notice to the legal personal representative of a deceased debtor of the presentment by a creditor of a petition under this section shall, in the extent of an order for administration being made thereon, be deemed to be equivalent to notice of an act of bankruptcy, and after such notice no payment or transfer of property made by the legal personal representative shall operate as a discharge to him as between himself and the Trustee; save as aforesaid, nothing in this section shall invalidate any payment made or any act or thing done in good c Revised as at 2nd day of September, 1997. Page 31 Section 67 Bankruptcy Law faith by the legal personal representative before the date of the order for administration. (11) In this section — “Court”, means any Court in which the deceased debtor might immediately, before his death, have been adjudicated bankrupt. PART XIII - Discharge Of A Bankrupt 67. Report of Trustee, its purport 67. (1) It shall be the duty of the Trustee, as soon as possible after the close of the public examination of the debtor, to make a report as to the state of the debtor’s affairs and as to the conduct of the debtor both before and during the bankruptcy, and he shall note particularly any matters which in his judgment might constitute offences under this Law, or any law relating to bankruptcy or which would justify the Court under this Law in refusing, suspending or qualifying an order for the debtor’s discharge. (2) Such report may be made, as to the bankrupt’s affairs and estate although, if the estate has not been fully administered, the Trustee may be unable to speak precisely as to details: Provided that in such a case, if it appears to the Court or the Judge before whom the debtor’s examination was held material to do so with reference to an application on the part of the debtor for an order of discharge, it shall be lawful for the Court or Judge to order the Trustee to make a further and exact report, and in any case where the estate of the debtor has been fully administered, the Trustee shall make a further and full report to the Court as to the assets and liabilities of the debtor, and as to the dividend paid. 68. Consideration of application for discharge and dealing with same 68. (1) The debtor may, at any time after the filing of such report, apply to the Judge hereinafter mentioned to appoint a day for hearing his application for an order of discharge. The Judge shall thereupon appoint a day and place for hearing such application. The prescribed notice of the time and place appointed shall be given in the prescribed manner. Any such application for an order of discharge shall be made in open Court, before the Judge before whom the examination of the debtor was held unless such Judge is ill, absent from the Islands or otherwise incapacitated, in which case it shall be made before the locum tenens or successor of such Judge: Provided that in such case it shall be lawful for such locum tenens or successor to use the notes of the Judge before whom the examination was held, and to Page 32 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 68 take such action upon them as the Judge himself might have taken under this Law. (2) The Trustee or any creditor may oppose the discharge and may show cause why it should be refused, postponed or made subject to conditions. (3) Whether any such opposition is made or cause shown or not, the Court shall take into consideration the report of the Trustee, and may either grant or refuse an absolute order of discharge, suspend the operation of the order for a specified time or grant an order or discharge subject to any conditions with respect to any earnings or income which may afterwards become due to the debtor, or with respect to his after-acquired property: Provided that the Judge shall refuse the discharge in all cases where the debtor has been convicted of an offence under this Law or any other offence connected with his bankruptcy, unless for special reasons to be stated in the order the Judge otherwise determines; and further if, on a consideration of the report of the Trustee, or of representations made by the Trustee or any creditor on the hearing of the application, and of the Judge’s notes of the examination of the debtor, and of the evidence, if any, adduced at the hearing of the application, and after hearing the debtor in support of the same, it appears to the Judge that any of the facts set out in subsection (4) has been proved the Judge shall — (a) refuse the discharge; (b) suspend the discharge for a period of not less than two years; (c) suspend the discharge until a dividend of not less than fifty cents in the dollar has been paid to the creditors; or (d) require the debtor, as a condition of his discharge, to consent to judgment being entered against him by the Trustee for any balance, or part of any balance, of the debts provable under the bankruptcy which is not satisfied at the date of the discharge, such balance, or part of any balance, of the debts to be paid out of the future earnings or after-acquired property of the debtor in such manner and subject to such conditions as the Judge may direct; but execution shall not be issued on the judgment without leave of the Court, which leave may be given on proof that the debtor has since his discharge acquired property or income available towards payment of his debts: Provided further that, if at any time after the expiration of two years from the date of any order made under this section, the debtor satisfies the Court that there is no reasonable probability of his being in a position to comply with the terms of such order, the Court may modify the terms of the order, or of any substituted order, in such manner and upon such conditions as it may think fit. (4) The facts referred to in subsection (3) are — c Revised as at 2nd day of September, 1997. Page 33 Section 68 Bankruptcy Law (a) that the debtor’s assets are not of a value equal to fifty cents in the dollar on the amount of his unsecured liabilities, unless he satisfies the Judge that the fact that the assets are not of a value equal to fifty cents in the dollar on the amount of his unsecured liabilities has arisen from circumstances for which he cannot justly be held responsible; (b) that the debtor has omitted to keep such books of account as are usual and proper in the business carried on by him, and as sufficiently disclose his business transactions and financial position within the three years immediately preceding his bankruptcy; (c) that the debtor has continued to trade after knowing himself to be insolvent; (d) that the debtor has contracted any debt provable in the bankruptcy without having at the time of contracting it any reasonable or probable ground of expectation (proof whereof shall lie on him) of being able to pay it; (e) that the debtor has failed to account satisfactorily for any loss of assets, or for any deficiency of assets to meet his liabilities; (f) that the debtor has brought on, or contributed to, his bankruptcy by rash and hazardous speculations, unjustifiable extravagance in living, gambling or culpable neglect of his business affairs; (g) that the debtor has put any of his creditors to unnecessary expense by a frivolous or vexatious defence to any action properly brought against him; (h) that the debtor has, within three months preceding the date of the act of bankruptcy, incurred unjustifiable expense by bringing a frivolous or vexatious action; (i) that the debtor has, within three months preceding the date of the act of bankruptcy, when unable to pay his debts as they become due, given an undue preference to any of his creditors; (j) that the debtor has, within three months preceding the date of the act of bankruptcy, incurred liabilities with a view of making his assets equal to fifty cents in the dollar on the amount of his unsecured liabilities; (k) that the debtor has, on any previous occasion, been adjudged bankrupt, or made a composition or arrangement with his creditors; (l) that the debtor has been guilty of any fraud or fraudulent breach of trust; (m) that the debtor has carried on trade by means of fictitious capital, by means of money raised or obtained at excessive rates of interest or under any plan or scheme involving the payment of excessive interest, fines, premiums, commissions or bonus; Page 34 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 69 (n) that he is indebted for damages recovered in any action for malicious injury to the person, reputation or property of the plaintiff therein; (o) that he has failed to deliver up to the Trustee all books, papers, documents or writings in his custody or under his control, or to disclose the name of the person or persons in whose custody or under whose control the same may be; (p) that his insolvency has arisen from rash or hazardous conduct as a trader; or (q) that he has wilfully failed to perform any of the duties cast upon him by section 39. (5) For the purposes of this section, a debtor’s assets shall be deemed of a value equal to fifty cents in the dollar on the amount of his unsecured liabilities when the Court is satisfied that the property of a debtor has realised, is likely to realise or with due care in realisation might have realised, an amount equal to fifty cents in the dollar of his unsecured liabilities, and a report by the Trustee shall be prima facie evidence of the amount of such liabilities. (6) For the purposes of this section the report of the Trustee shall be prima facie evidence of the statements therein contained. (7) Notice of the appointment by the Judge of the day for hearing the application for discharge shall be published in the prescribed manner, and sent fourteen days at least before the day so appointed to each creditor who has proved, and the Judge may hear the Trustee, and may also hear any creditor. At the hearing the Judge may put such questions to the debtor and receive such evidence as he may think fit. (8) The powers of suspending and of attaching conditions to a debtor’s discharge may be exercised concurrently. (9) A discharged bankrupt shall, notwithstanding his discharge, give such assistance as the Trustee may require in the realisation and distribution of such of his property as is vested in the Trustee, and if he fails to do so he is guilty of contempt of Court; and the Court may also, if it thinks fit, revoke his discharge, but without prejudice to the validity of any sale, disposition or payment duly made or thing duly done, subsequent to the discharge but before its revocation. 69. Appeal 69. Where any application is by section 50 or by sections 66 to 68 required to be made in the first instance to the Judge, an appeal shall lie from his order to the Court of Appeal. c Revised as at 2nd day of September, 1997. Page 35 Section 70 Bankruptcy Law 70. Conditions of discharge 70. Where the Court grants an order of discharge it may grant it subject to any condition or conditions touching any salary, pay, emoluments, profits, wages, earnings or income which may afterwards become due to the bankrupt, and touching after- acquired property of the bankrupt, and it may order that the bankrupt shall thereafter pay to the Trustee for the benefit of the creditors under the bankruptcy such sum as may be stated in the order granting him his discharge, but payment of such sum shall only be enforced against the debtor by leave of the Court, and to such extent, from time to time, as the Court may approve, and if subsequently the debtor should be adjudged bankrupt, or a provisional order be made against him, the amount, if any, remaining unpaid under any such order for payment shall be postponed until the debts due to the creditors under such subsequent bankruptcy or provisional order shall have been fully paid or satisfied. 71. How far order of discharge releases debtor from his debts 71. An order of discharge shall not release the bankrupt from any debt or liability incurred by means of any fraud or breach of trust, nor from any debt or liability whereof he has obtained forbearance by any fraud, but it shall release the bankrupt from all other debts provable under the bankruptcy with the exception of — (a) debts due to the Crown or to the Government of the Islands; and (b) debts with which the bankrupt stands charged at the suit of the Crown, or of any person, for any offence against a statute or law relating to any branch of the public revenue, or at the suit of any public officer on a bail bond entered into for the appearance of any person prosecuted for any such offence, and he shall not be discharged from such excepted debts unless the Financial Secretary certifies in writing his consent to his being discharged therefrom. 72. Order of discharge does not release partner or joint debtor 72. An order of discharge shall not release any person who, at the date of the order of adjudication, was a partner with the debtor, or was jointly bound, or had made any joint contract with him. 73. How order of discharge pleaded and proved 73. An order of discharge shall be sufficient evidence of the bankruptcy, and of the validity of the proceedings thereon; and in any proceedings that may be instituted against a bankrupt who has obtained an order of discharge in respect of any debt from which he is released by such order, the bankrupt may plead that the cause of action occurred before his discharge, and may give this Law and the special matter in evidence. Page 36 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 74 PART XIV - Administration Of A Debtor’s Estate By The Trustee 74. Estate of debtor to be administered for the benefit of his creditors 74. The Trustee under the control of the Court shall administer the debtor’s estate for the benefit of the creditors subject to this Part. 75. Trustee to take possession of debtor’s property 75. The Trustee shall, as soon as may be after the making of a provisional order but subject to the directions of the Court, take possession of all property real and personal, and all books, papers and documents of the debtor, and exercise such of the powers conferred on him by this Law as may be necessary for the purpose of acquiring and retaining possession thereof, and for the purpose of protecting the rights of the creditors. 76. Trustee to recover debts 76. The Trustee shall, to the best of his power, discover and recover all debts due to the debtor’s estate. 77. Trustee to examine debtor’s books 77. The Trustee shall examine and verify the books, papers and vouchers relating to the debtor’s affairs. 78. Power of Trustee to sell property 78. The Trustee may sell all or any part of the property of the debtor (including the goodwill of the business, if any, and the debts growing due to the debtor) by public auction or tender or private contract, and transfer the whole thereof to any person or company, or sell the same in parcels, and accept as the consideration for such transfer and sale a sum to be paid or secured to be paid at such time and in such manner as he thinks fit. 79. How far Trustee may carry on debtor’s trade 79. The Trustee may carry on the trade of the debtor so far as may be necessary or expedient for the beneficial winding up or sale of the same, and for that purpose, or for the general management and realisation of his property, employ the debtor himself or any other person or persons. 80. Trustee’s power to bring or defend actions 80. The Trustee may bring, institute or defend any action or other legal proceedings relating to the property of the debtor. c Revised as at 2nd day of September, 1997. Page 37 Section 81 Bankruptcy Law 81. Trustee may recover dividends 81. The Trustee may prove, rank, claim and draw dividend, in respect of any debt due to the debtor. 82. Trustee’s power to arbitrate or compromise claims of debtor 82. The Trustee may refer any dispute to arbitration, compromise all debts, claims and liabilities, whether present or future, certain or contingent, liquidated or unliquidated, subsisting or supposed to subsist between the debtor and any person who may have incurred any liability to the debtor, upon the receipt of such sums payable at such times and generally upon such terms as may be agreed upon. 83. Trustee’s power to compromise claims against debtor 83. The Trustee may make such compromise or other arrangement as may be thought expedient with creditors, or persons claiming to be creditors, in respect of any debts provable under the petition. 84. Trustee’s power to compromise claims as to debtor’s property 84. The Trustee may make such compromise or other arrangement as may be thought expedient with respect to any claim arising out of or incidental to the property of the debtor, made or capable of being made on the Trustee by any person, or by the Trustee on any person. 85. Powers of Trustee as to exercising discretion or executing deeds 85. The Trustee may exercise any powers and discretions the capacity to exercise which is vested in the Trustee under this Law, and may execute any powers of attorney, deeds and other instruments, for the purpose of carrying into effect this Law. 86. Trustee’s power as to estates tail 86. The Trustee may deal with any property to which the debtor is beneficially entitled as tenant in tail in the same manner as the debtor might have dealt with the same. 87. Proof of debts 87. The Trustee shall receive and decide on proof of debts. 88. Trustee under control of the Court 88. The Trustee shall be deemed an accounting party to the Court, and shall be under the control and subject to the directions of the Court. 89. Trustee may ask the Court for directions 89. The Trustee may, at any time, apply to the Court for directions respecting his rights or duties with regard to the debtor’s estate, or with regard to any matters arising out of the management or conduct of the estate. Page 38 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 90 90. Trustee acting under such directions protected 90. The Trustee obtaining bona fide directions of the Court or acting bona fide on such directions, shall be deemed, so far as regards his own responsibility, to have discharged his duty therein as Trustee with regard to the matter in respect of which such direction is given. 91. Trustee to keep books 91. (1) The Trustee shall keep in manner prescribed proper books, in which he shall, from time to time, make or cause to be made entries or minutes of such matters in relation to the debtor’s estate as may be prescribed. (2) Any creditor of the debtor may, at such times as may be prescribed, personally or by his agent inspect such books. 92. Money received to be deposited in Government Savings Bank 92. (1) The Trustee shall, forthwith or within such time as may be prescribed, pay all sums of money from time to time received by him in the course of the administration of estates of debtors into the Government Savings Bank to the credit of an account entitled “The Trustee in Bankruptcy Account” and the manager or other proper officer of the Savings Bank is hereby authorised and required to receive the same into the said account irrespective of amount. (2) Interest shall be allowed on such money in the same way as interest is allowed on deposits of private persons.

(3) The Trustee may draw out of the Government Savings Bank in manner provided by regulations made under the Government Savings Bank Law, or any law amending or substituted for the same, any money standing to the credit of the Trustee in Bankruptcy Account for the purposes of administering any estate, and until money drawn out as aforesaid is applied to such purposes the Trustee shall, subject to any order of a court of competent jurisdiction, deal with such money in accordance with such general or special directions as may be given by the Governor in Council: Provided that the Trustee shall never expend the money of one estate for the purposes of another estate. 93. All moneys to be paid into Court after two years 93. The Trustee shall, at the expiration of two years from the date of the provisional order, pay all moneys then in hand, and all moneys thenceforth received by him, into Court in manner prescribed, unless, under special circumstances, the Court shall, by order, extend the time. c Revised as at 2nd day of September, 1997. Page 39 Section 94 Bankruptcy Law 94. Audit of Trustee’s accounts 94. The Trustee shall submit his accounts for audit at such times and in such manner as may be prescribed. PART XI - Control Of The Court Over The Administration Of The Debtor’s Estate By The Trustee 95. Trustee responsible to the Court 95. The Court shall examine all statements submitted to it by the Trustee, and may order the Trustee to account for any misfeasance, neglect or omission and to make good any loss which the estate of the debtor may have sustained by such misfeasance, neglect or omission. 96. Power of Court to examine Trustee and his books 96. The Court may, at any time, require the Trustee to answer any enquiry in relation to any matter in which he is engaged, and may examine him or any other person on oath concerning such matter, and may cause his bankruptcy books, either generally or in relation to any particular estate, to be examined by any person to be named by it. 97. Power of Court to control Trustee 97. (1) If the Trustee, at any time, improperly neglects, refuses or delays to assume the management of any estate or trust under this Law, improperly acts or omits to act in the management of any estate or trust vested in or administered by him or the duties of which he has entered upon, improperly neglects, refuses or delays to pay forthwith the amount of any judgment, decree or order recovered against him, pays the amount of any such judgment, decree or order out of any funds not properly liable to such payment or improperly acts or omits to act in any other matter with respect to any estate or trust vested in or administered by him or with respect to any duty imposed upon him by this Law, or if there is reasonable ground to think that he is about improperly to act, or to omit to act, with respect to any of the matters aforesaid, any person interested in such estate, trust or matter may apply to the Court for an order requiring him to do, or to refrain from doing, the act in respect of which such person complains, and the Court may thereupon make such order as it thinks fit. (2) Such order may direct that the Trustee shall pay out of his own pocket any sum of money required to compensate any person, estate or trust, for the consequences of any wrongful act or omission of the Trustee or receiver. Page 40 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 98 98. Appeal to the Court of Appeal against Trustee 98. The debtor, any of the creditors or any other persons, if aggrieved by any act or decision or estimate of the Trustee, may apply to the Court of Appeal, and the Court of Appeal may confirm, reverse or vary the act complained of, and may make such order in the matter as it think just, and may direct any question of fact or assessment of value or damage to be tried by a jury. 99. Power of Court to enable any person to do acts for the debtor 99. Where the debtor refuses or neglects to do any act in reference to the recovery, sale or transfer of, or otherwise dealing with, any property remaining in him under this Law in trust for his creditors, for twenty-four hours after he has been required by the receiver or Trustee to do the same, the Court may, on application by the receiver or Trustee, by order authorise such act to be done in the name of the debtor, or otherwise by any person named in the order for that purpose, and every act done by such person shall be as effectual for all purposes as if the debtor had done the same, and shall not be revocable or impeachable by the debtor. PART XVI - Distribution Of Property Of Debtor 100. What the property of the debtor comprises 100. The property of the debtor divisible amongst his creditors and vesting in the Trustee (and in this Law referred to as the property of the debtor) shall comprise — (a) all such property as may belong to or be vested in the debtor at the commencement of the bankruptcy or may be acquired by or devolve on him at any time previous to his discharge; (b) the capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the debtor for his own benefit at the commencement of the bankruptcy, or at any time previous to his discharge; and (c) all goods and chattels being at the commencement of the bankruptcy in the possession order or disposition of the debtor by the permission of the true owner, of which goods and chattels the debtor is reputed owner, or of which he has taken upon himself the sale or disposition as owner, provided that things in action, other than debts due or growing due to him, shall not be deemed goods and chattels within the meaning of this section, and shall not comprise — (i) property held by the debtor in trust for any other person; or (ii) the tools, if any, of his trade, and the necessary wearing apparel and bedding of himself, his wife and children to a value, inclusive of c Revised as at 2nd day of September, 1997. Page 41 Section 101 Bankruptcy Law tools and apparel and bedding, not exceeding sixty dollars in the whole. 101. Appropriation of portion of salary of debtor payable by Government 101. Where a debtor is in the enjoyment of any salary, pension or allowance paid by the Government, the Trustee shall receive for distribution among the creditors so much of the debtor’s salary, pension or allowance as the Court, upon application of the Trustee, thinks just and reasonable, to be paid in such manner and at such times as the Court directs. 102. Appropriation of portion of other salary or income 102. Where a debtor is in the receipt of a salary or income other than as aforesaid, the Court, upon the application of the Trustee, shall, from time to time, make such order as it thinks just for the payment of such salary, income or any part thereof, to the Trustee, to be applied by him in such manner as the Court may direct. 103. Delivery to Trustee of moneys and securities of debtor 103. Any treasurer or other officer, or any banker, attorney-at-law or agent of a debtor, shall pay and deliver to the Trustee all moneys and securities in his possession or power, as such officer or agent, which he is not by law entitled to retain as against the debtor or the Trustee or receiver. 104. Transfer of stocks, shares, etc. 104. Where any part of the property of the debtor consists of stock, shares in ships, shares or any other property transferable in the books of any company, office or person, the right to transfer such property shall be absolutely vested in the Trustee to the same extent as the debtor might have exercised the same if a petition had not been filed against or by him. Page 42 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 105 105. Onerous and unprofitable property of debtor; power of Trustee to disclaim same; effect of disclaimer 105. (1) Where any part of the property of the debtor consists of land of any tenure burdened with onerous covenants, of unmarketable shares in companies of unprofitable contracts or of any other property that is unsaleable, or not readily saleable, by reason of its binding the possessor thereof to the performance of any onerous act, or to the payment of any sum of money, the Trustee, notwithstanding that he has endeavoured to sell, has taken possession of such property or exercised any act of ownership in relation thereto, may, in writing under his hand, disclaim such property, and upon the execution of such disclaimer the property disclaimed shall, if the same is a contract be deemed to have determined at the date of the filing of the bankruptcy petition so far as regards the interest of the debtor therein, and the liability of himself and property and of the Trustee thereunder and if the same is a lease to have determined at the same date, so far as regards the interests of the debtor therein and the liability of himself and his property and the Trustee to the performance of the covenants and the conditions thereof, and if the same are shares in any company to have been forfeited at the same date; and whatever is the nature of the property it shall (unless the Court otherwise orders) pass to the person, if any, entitled thereto on the determination of the estate or interest of the debtor therein, and in no case shall any estate, interest or liability therein or thereunder remain in the debtor. (2) Such disclaimer shall not prejudice the rights or remedies or affect the obligations of any person other than the debtor and the Trustee, and the Court may, on application made by any person claiming any interest in the disclaimed property, and upon hearing such persons as it thinks fit, make an order for the vesting of the same property in or delivery thereof (together with any deeds or documents relating thereto) to any person or persons entitled thereto, or a trustee for him or them, and upon such terms as the Court may think just, and upon any such vesting order being made the property comprised therein shall vest according to the tenor thereof in the person or persons therein named in that behalf without any conveyance or assignment for the purpose. (3) Any person injured by the operation of any such disclaimer as aforesaid shall be deemed to be a creditor of the debtor to the extent of such injury and may accordingly prove the same as a debt under the bankruptcy petition. c Revised as at 2nd day of September, 1997. Page 43 Section 106 Bankruptcy Law 106. Limit to Trustee’s right to disclaim 106. The Trustee shall not be entitled to disclaim any property under this Law in any case where an application in writing has been made to him as Trustee, by any person interested in such property, requiring such Trustee to decide whether he will disclaim or not, and the Trustee has, for a period of not less than twenty-eight days after the receipt of such application, or such further time as may be allowed by the Court, declined or neglected to give notice whether he disclaims the same or not. PART XVII - Benefit Of Transactions Affecting The Debtor And His Property 107. Settlement by debtor, how far void as against Trustee 107. (1) Any settlement of property not being a settlement made before and in consideration of marriage, or made in favour of a purchaser or incumbrancer in good faith and for valuable consideration, or a settlement made on or for the wife or children of the settlor of property which has accrued to the settlor after marriage, in right of his wife, shall, if a provisional order in bankruptcy, or an absolute order in bankruptcy in cases where no provisional order is made, takes effect against the settlor within two years after the date of the settlement, be void against the Trustee and shall, if the settlor becomes bankrupt at any subsequent time within ten years after the date of the settlement be void against the Trustee unless the parties claiming under the settlement can prove that the settlor was, at the time of making the settlement, able to pay all his debts without the aid of the property comprised in the settlement, and that the interest of the settlor in such property has passed to the trustee of such settlement on the execution thereof. (2) Any covenant or contract made by any person in consideration of marriage, for the future settlement upon his wife or children of any money or property wherein he had not, at the date of his marriage, any estate or interest whether vested or contingent, in possession or remainder and not being money or property of or in right of his wife, shall, if a provisional order, or an absolute order in bankruptcy in cases where no provisional order is made, takes effect against him before such money or property has been actually transferred or paid pursuant to such contract or covenant be void against the Trustee. (3) In this section — “settlement” includes any conveyance, gift or transfer of property. Page 44 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 108 108. Extension of power to avoid certain voluntary settlements, etc., as against the representatives of deceased settlers whose estates are insolvent 108. In the administration by the Court of the assets of any deceased person, it shall be lawful for the Court, on the petition of any creditor or creditors of such deceased person whose claim or claims together, against the estate would have been sufficient to support a petition in bankruptcy against such person had he not died, and on proof that the assets of such person were, at the time of his death, insufficient to pay his debts and liabilities in full, to order that any settlement of property made by such deceased person within the meaning of section 107 and except as therein excepted, or any conveyance or transfer of property or charge thereon, or any payment, obligation or judicial proceeding, made, incurred, taken or suffered by such person, he being at the time of making, taking, paying or suffering the same, unable to pay his debts as they become due from his own moneys, in favour of any creditor or any person in trust for any creditor, with a view of giving such creditor preference over the other creditors, and which settlement, conveyance, transfer, charge, payment, obligation or judicial proceeding would have been void against the Trustee if a provisional order had taken effect against such deceased person at the moment of his death, shall be void as against the executor, administrator, receiver or other person charged with the administration of the assets of such decreased person: Provided that such petition shall be presented within six months after the death of such deceased person: Provided also that the proper funeral and testamentary expenses, incurred by the legal personal representative in and about the deceased persons estate, shall be deemed a preferential debt, and the payment thereof by the legal personal representative shall be valid, or, if the same have not been paid at the time of the making of an order under this section, they shall be payable in full out of the debtor’s estate, in priority to all other debts: Provided also that nothing herein shall be deemed to make the legal personal representative of such deceased person personally liable in respect of any payment made, or act or thing done, in good faith before the date of the order for the administration of the assets of such person by the Court. c Revised as at 2nd day of September, 1997. Page 45 Section 109 Bankruptcy Law 109. Voluntary expenditure of moneys on the property of another to be deemed a settlement if order in bankruptcy takes effect within two years against the person so expending the same 109. The voluntary expenditure of any moneys by any person in building or making permanent improvements on the property of another shall be deemed to be a settlement of such moneys on such other person within the meaning of section 107, and if an order in bankruptcy, as mentioned in section 107, takes effect against the person making such expenditure within two years from the date of such expenditure the Trustee shall be entitled to recover, from the owner of the property benefited by such expenditure, an amount equal to the increase in the value of such property brought about by such expenditure, and shall have a lien on such property for such amount, and on the proceeds thereof if the same have been sold: Provided always that such lien shall not prevail against the bona fide purchaser for valuable consideration who, at the time of the purchase, either had no notice of such expenditure, or, if he had such notice, had no notice of an act of bankruptcy on the part of the person making the same, available for adjudication against him. 110. Bankruptcy of a firm or of one or more partners, effect thereof on the partnership assets and on the property of each partner 110. (1) When a provisional order has been made against a firm of partners, all the separate property of each of the bankrupts as well as all the joint property of the partnership, shall immediately pass to and vest in the Trustee. (2) Where a provisional order has been made against one partner in a firm, there shall pass to the Trustee as well the separate property of such partner as the share to which, as between himself and his partner, the bankrupt is entitled in the assets of the firm after paying or providing for all the liabilities. For the purpose of ascertaining such share, the accounts of the firm shall be taken in such manner as the Court may direct. (3) In the case of bankruptcy of partners, or of any member of a partnership firm, the joint estate shall be applicable in the first instance in payment of their joint debts, and the separate estate of each partner shall be applicable in the first instance in payment of his separate debts. If there is a surplus of the separate estates it shall be dealt with as part of the joint estate. If there is a surplus of the joint estate it shall be dealt with as part of the respective separate estates in proportion to the rights and interest of each partner in the joint estate. Page 46 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 111 111. Fraudulent preferences 111. (1) Every conveyance or transfer of property, or charge thereon, and every payment, obligation and judicial proceeding, made, incurred, taken or suffered by any person unable to pay his debts as they become due from his own moneys, in favour of any creditor or any person in trust for any creditor, with a view of giving such creditor a preference over the other creditors, shall, if a provisional order takes effect against the person making, taking, paying or suffering the same within six months after the date of making, taking, paying or suffering the same, be deemed fraudulent and void as against the Trustee. (2) Every conveyance or transfer of property, real or personal, made by any person unable to pay his debts to any other person in trust for any creditor shall be absolutely void unless the same were made and executed with the assent of seventy-five per cent in number and value of the creditors of such person. 112. Conveyance, assignment, etc., of stock-in-trade, etc. 112. Every conveyance, assignment, transfer, sale or disposition made by any trader unable to pay his debts of his stock-in-trade, debts or things in action relating to his business or any part thereof, otherwise than in the ordinary way of business, to any other person shall, if a provisional order or an absolute order takes effect against the person making the same within six months after the date of making the same be deemed fraudulent and void as against the Trustee; unless the same were made and executed with the assent of seventy-five per cent in number and value of the creditors of such person; or unless the same were made and executed after not less than twenty-one days’ notice in the Gazette and in a newspaper circulated in the Islands of the intention of the trader to make such conveyance, assignment or transfer, sale or disposition. 113. Entry of vacatur on margin of record of deed declared void 113. When any deed is declared void under this Law, the Court shall direct the Public Recorder to enter a note of such decree on the margin of any deed to which it related that may be recorded in the office of the Public Recorder. 114. Proceeds of executions against debtor 114. When the goods of a person have been taken in execution in respect of judgment and sold, the bailiff or officer executing the process shall, if he has notice of a petition filed by or against such person, hold the balance of the proceeds of the sale, after deducting expenses, upon trust to pay the same to the Trustee or other person entitled thereto under the petition. c Revised as at 2nd day of September, 1997. Page 47 Section 115 Bankruptcy Law 115. Delivery of goods taken in execution but not sold 115. When the goods of a person have been taken in execution in respect of judgment, and not sold before the bailiff or officer executing the process receives notice of the appointment of a receiver or Trustee under a bankruptcy petition presented against or by such person, such officer shall forthwith, after receipt of the notice, deliver up such goods to the receiver or Trustee, and the costs incurred by such officer in respect of such execution shall be paid out of the property of the debtor. 116. How far creditor entitled to benefit of execution or attachment against debtor 116. A creditor who has levied execution on the property of a debtor, or has made an attachment thereof, shall not be entitled to retain the benefit of such execution or attachment unless and except insofar as he has, before the filing of a petition against or by such debtor, enforced such execution by sale of the property seized, or enforced such attachment by actual possession of the moneys attached or, as the case may be, by sale of the property attached. 117. Distress for rent, landlord’s rights 117. (1) The landlord or other person to whom any rent is due from the debtor may, at any time, either before or after the commencement of the bankruptcy, distrain upon the goods or effects of the debtor for the rent due to him from the debtor (2) If such distress for rent be levied after the commencement of the bankruptcy it shall be available only for one year’s rent accrued due prior to the date of the provisional order. (3) After notice received by or on behalf of the person making the distress of the appointment of the Trustee or receiver no sale shall be made of the goods distrained, unless the Court otherwise orders, except by the Trustee or receiver, and the rent for which such distress is available, and the expenses thereof, shall be paid out of the proceeds of the sale. 118. Protection of certain bona fide transactions with bankrupt before petition filed 118. Subject to the provisions of this Law relating to the proceeds of the sale of goods which have been seized, and to the provisions of this Law and every other Law avoiding, on the ground of their being fraudulent, certain settlements conveyances, transfers, charges, payments, obligations and judicial proceedings, the following dealings and transactions relating to the property of the debtor, if they take place before the filing of the petition, shall be valid notwithstanding any prior act of bankruptcy committed by the debtor — (a) every payment by the debtor to any of his creditors and every payment or delivery to him; Page 48 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 119 (b) every conveyance, sale or assignment for valuable consideration by and with him; and (c) every execution and attachment against his goods and chattels executed and levied by seizure and sale: Provided that the person to, by or with whom such payment, delivery, conveyance, assignment, sale, contract, dealing or transaction was made, executed or entered into, or at whose suit or on whose account every such execution or attachment was issued, had not, at the time of such payment, delivery, conveyance, assignment, contract, dealing or transaction, or at the time of the executing or levying of such execution or attachment, or at the time of the making of any sale thereunder, notice of any act of bankruptcy committed by the debtor and available for adjudication against him at the time of the filing of the petition. PART XVIII - Debts Provable Against The Debtor’s Estate 119. What debts are and what are not provable against debtor’s estate 119. (1) Demands in the nature of unliquidated damages arising otherwise than by reason of a contract or promise shall not be provable under a bankruptcy petition, and no person having notice of any act of bankruptcy available for adjudication against the debtor shall prove for any debt or liability contracted by the debtor subsequently to the date of his so having notice, unless the Court is of opinion that the property of the debtor has been benefited or increased, or that his debts or liabilities have been diminished, by the payment of the money or execution of the contract upon which the debt or liability sought to be proved has arisen. (2) Save as aforesaid, all debts and liabilities, present or future, certain or contingent, to which the debtor is subject at the date of the provisional order or to which he may become subject by reason of any obligation incurred previously to the date of the order, shall be deemed to be debts provable under a bankruptcy petition under this Law. 120. Estimate of debts of uncertain value 120. An estimate shall be made by the Trustee, according to the rules of Court for the time being in force, so far as the same may be applicable, and where they are not applicable at the discretion of the Trustee, of the value of any debt or liability provable which by reason of its being subject to any contingency or contingencies or for any other reason does not bear a certain value. c Revised as at 2nd day of September, 1997. Page 49 Section 121 Bankruptcy Law 121. Liability defined 121. “Liability” shall, for the purposes of this Law, include any compensation for work or labour done, any obligation or possibility of an obligation to pass money or money’s worth on the breach of any express or implied covenant, contract, agreement or undertaking, whether such breach does or does not occur, or is or is not likely to occur, or capable of occurring, before the discharge of the debtor, and generally it shall include any express or implied engagement, agreement or undertaking to pay, or capable of resulting in the payment of money or money’s worth, whether such payments be — (a) as respects amount, fixed or unliquidated, and payable in one sum or by instalments, or periodical payments; (b) as respects time, present or future, certain or dependent on any one contingency, or on two or more contingencies; or (c) as to mode of valuation, capable of being ascertained by fixed rules, or assessable only by a jury, or as matter of opinion. 122. Interest on debts 122. Interest on any debt provable under this Law may be allowed under the circumstances in which interest would have been allowed by a jury if an action had been brought for such debt. 123. Interest on debts, how calculated 123. (1) Where a debt has been proved and the debt includes interest or any pecuniary consideration in lieu of interest or in the nature of premiums, fines bonus or commissions, such interest or consideration shall, for the purpose of dividend, be calculated at a rate not exceeding six per cent per annum, without prejudice to the right of a creditor to receive out of the estate any higher rate of interest to which he may be entitled after all the debts proved in the estate have been paid in full. (2) In dealing with the proof of the debt — (a) any account settled between the debtor and the creditor within three years preceding the date of the provisional order may be examined, and, if it appears that the settlement of the account forms substantially one transaction with any debt alleged to be due out of the debtor’s estate (whether in the form of renewal of a loan or capitalisation of interest or ascertainment of loans or otherwise) the account may be reopened and the whole transaction treated as one; (b) any payments made by the debtor to the creditor before the provisional order whether by way of bonus, premium, fines, commissions or otherwise, and any sums received by the creditor before the provisional order from the realisation of any security for the debt, shall, Page 50 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 124 notwithstanding any agreement to the contrary, be appropriated in the first place to the satisfaction of interest at a rate not exceeding six per cent per annum as in this section previously provided, and thereafter to the satisfaction of the principal; and (c) where the debt due is secured and the security is realised after the provisional order, or the value thereof is assessed in the proof, the amount realised or assessed shall be appropriated in the first place to the satisfaction of interest at a rate not exceeding six per cent per annum as in this section previously provided, and thereafter to the satisfaction of the principal. 124. Postponement of husband’s and wife’s claims 124. (1) Where a married woman has been adjudged bankrupt, her husband shall not be entitled to claim any dividend as a creditor in respect of any money or other estate lent or entrusted by him to his wife for the purposes of her trade or business until all claims of the other creditors of his wife for valuable consideration in money or money’s worth have been satisfied. (2) Where the husband of a married woman has been adjudged bankrupt, any money or other estate of such woman lent or entrusted by her to her husband for the purpose of any trade or business carried on by him or otherwise, shall be treated as assets of his estate, and the wife shall not be entitled to claim any dividend as a creditor in respect of any such money or other estate until all claims of the other creditors of her husband for valuable consideration in money or money’s worth have been satisfied. 125. Secured creditors, how they may prove 125. (1) A secured creditor may on giving up his security prove for his whole debt, or he may prove for any balance due to him after realising or giving credit for the value of his security in manner and at the time prescribed. (2) A secured creditor not complying with the foregoing conditions shall be excluded from proof. 126. Proofs in respect of distinct contracts in different capacities 126. If the debtor is, at the date of the provisional order, liable in respect of distinct contracts as a member of two or more distinct firms, or as a sole contractor and also as a joint contractor, the circumstance that such firms are in whole or in part composed of the same individuals, or that the sole contractor is also one of the joint contractors, shall not prevent proof in respect of such contracts against the properties respectively liable upon such contracts. c Revised as at 2nd day of September, 1997. Page 51 Section 127 Bankruptcy Law 127. Mutual dealings and set off 127. Where there have been mutual credits, mutual debts or other mutual dealings, between the debtor and any person having a debt provable under the bankruptcy petition, an account shall be taken of what is due from the one party to the other in respect of such mutual dealings, and the sum due from the one party shall be set off against any sum due from the other party, and the balance of such amount, and no more, shall be proved or paid on either side respectively. 128. Landlord may prove for residue of rent not recoverable by distress 128. A landlord or other person to whom rent is due from the debtor, and who has been prevented from recovering the full amount of such rent by the operation of section 117, may prove for so much of the rent as by reason of that section he was prevented from recovering. 129. Proving for proportion of rent to date of provisional order 129. When any rent or other payment falls due at stated periods, and the provisional order is made at any time other than one of such periods, the person entitled to such rent or payment may prove for a proportionate part thereof up to the date of such order as if such rent or payment grew due from day to day. PART XIX - Distribution Of Assets And Dividends 130. Notice of dividend 130. Before declaring a dividend the Trustee shall cause a notice to be gazetted, stating the day on which the dividend is intended to be declared, and except as hereinafter provided, those debts only in respect of which proof has been made or tendered before that day shall be allowed to participate in the dividend. 131. Calculation and distribution of dividend 131. In the calculation and distribution of a dividend it shall be obligatory on the Trustee to make provision for debts provable under this Law appearing from the debtor’s statements, or otherwise, to be due to persons resident in places so distant from the place where the Trustee is acting that in the ordinary course of communication they have not had sufficient time to tender their proofs, and also for debts provable under the bankruptcy petition which have been notified to him in manner prescribed, and are subject of claims not yet determined, and on such debt being established the creditor shall be entitled to receive the dividend reserved thereon. Page 52 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 132 132. Rights of creditors who prove after dividend 132. Creditors may prove their debts in manner prescribed, and creditors who have not proved their debts before the declaration of any dividend or dividends shall, on the occasion of the next dividend being declared, be entitled to be paid any dividend or dividends they have failed to receive before any moneys are made applicable to the payment of any other dividend or dividends, but they shall not be entitled to disturb the distribution of any dividend declared before their debts were proved, by reason that they have not participated therein. 133. Final dividend, notice thereof 133. (1) When all the property of the debtor from which any moneys available for division amongst the creditors can, in the opinion of the Trustee, be reasonably expected to arise has been realised, the Trustee shall declare a final dividend. (2) Before so doing he shall give notice in manner prescribed to the persons whose claims to be creditors of the debtor have been notified to him, and not established to his satisfaction, that if they do not establish such claims to the satisfaction of the Court within a time to be limited for that purpose by the notice he will proceed to make final division of the property without regard to such claims. (3) After the expiration of such time, or if the Court, on application by any such claimant, grants further time to him for establishing his claim, then on the expiration of such further time the property of the debtor divisible amongst the creditors shall be divided amongst the creditors who have proved their debts without regard to the claims of any other persons. 134. How dividend recoverable if not paid 134. No action shall lie for a dividend, but if the Trustee having control of any dividend refuses to pay the same the Court may, if it thinks fit, order him to pay the same, and also to pay out of his own moneys interest thereon for the time that it is withheld, and the cost of the application. PART XX - Rules As To Priority Of Payment 135. Preferential debts 135. (1) The following debts shall be paid in priority to all other debts, and between themselves such debts shall rank equally, and shall be paid in full unless the property of the bankrupt is insufficient to meet them, in which case they shall abate in equal proportion between themselves — (a) all public taxes imposed by law due from the debtor at the date of the provisional order not exceeding in the whole one year’s taxes; c Revised as at 2nd day of September, 1997. Page 53 Section 136 Bankruptcy Law (b) all wages or salary of any clerk or servant in respect of services rendered to the debtor during four months next preceding the date of the provisional order, not exceeding one hundred dollars; and (c) all wages of any labourer or workman in respect of services rendered to the debtor during four months next preceding the date of the provisional order. (2) Save as aforesaid, all debts provable under the petition shall be paid pari passu. 136. Creditors of a debtor’s firm postponed to separate creditors of debtors 136. If a provisional order is made against one member of a partnership, a creditor to whom that partner is indebted jointly with the other partners of the firm or any of them shall not receive any dividend out of the separate property of the first mentioned partner until all the separate creditors have received the full amount of their respective debts. 137. Allowances to debtor for support or services 137. The Trustee may, from time to time, make such allowances as he thinks just to the debtor out of his property for the support of the debtor and his family, or in consideration of his services if he is engaged in winding up his estate, but such allowance may be revised by the Court, and where no allowance has been made the Court may, on cause shown, make an allowance. 138. Surplus of estate payable to debtor 138. The debtor shall be entitled to any surplus remaining after payment of his creditors, and of the costs, charges and expenses of the proceedings under the bankruptcy petition. PART XXI - Unclaimed Bankrupt Estates 139. When moneys of insolvent estate remain in Treasury for twenty years Financial Secretary to report to Governor 139. Where any moneys of an insolvent or bankrupt estate have been or shall be lodged in the Treasury under any law and have remained in the books of the Treasury for twenty years or upwards, and during that period no claim has been or shall be successfully made thereto, the Financial Secretary shall report the facts of the case to the Governor. Page 54 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 140 140. Advertisement in Gazette and newspaper 140. On the direction of the Governor in writing on such report, that proceedings be taken under this Law, the Financial Secretary shall give public notice by advertisement in the Gazette, the London Gazette and in one or more newspapers published in the Islands that a given part of the estate of a bankrupt or insolvent, to be named in such advertisement, has been lying in the Treasury for a period to be specified as aforesaid, and that unless within one year from the date of the first publication of such advertisement, claim to the money therein specified is made and substantiated to the satisfaction of the Financial Secretary or a Court of competent jurisdiction, such moneys will become subject to section 141. The said advertisement shall be published as often during the said year as the Financial Secretary may deem expedient but not less than four times. 141. Unclaimed funds to become general revenues of the Islands 141. Upon the expiration of one year from the date of the first publication of such advertisement, or from the date of the latest of such advertisements if they are not simultaneous, and after the due publication of the same, any of the moneys in question to which no claim shall have been made and substantiated shall lapse to and become part of the general revenues: Provided that, if within the year, a claim to any portion of the moneys in question has been duly made, but is pending at the expiration of the said year — (a) before the Financial Secretary for consideration; or (b) before a court of competent jurisdiction, and there shall be lodged with the Financial Secretary a certificate to that effect signed by a Judge of that court, then such moneys shall not lapse to or become part of the general revenues of the Islands until — (i) the Financial Secretary has decided that such claim is not good and no certificate has been lodged with the Financial Secretary within one month of such decision; or (ii) any such certificate is cancelled or revoked. 142. Action for money claimed to be against the Governor 142. It is lawful for any person desirous of claiming any such moneys lodged in the Treasury but whose claim has been rejected by the Financial Secretary to claim the same by means of an action against the Governor on behalf of the Government of the Islands as defendant. c Revised as at 2nd day of September, 1997. Page 55 Section 143 Bankruptcy Law PART XXII - Joint Debtors 143. Petition against partners or joint debtors 143. Any creditor whose debt is sufficient to entitle him to present a petition against all the members of a partnership, or against all of several joint debtors, may present such petition against any one or more of such persons without including the others. 144. Dismissal of petition against some respondents only 144. Where there are more respondents than one in a petition, the Court may dismiss the petition as to one or more of them, without prejudice to the effect of the petition as against the other or others of them. 145. Power to extend provisional order against partners to their separate estate 145. Where a provisional order has been made against all the members of a partnership, or against several joint debtors, the operation of such order shall in the first instance be limited to the debt jointly due from such partners or debtors, but the Court may, on sufficient cause being shown by any joint or separate creditor within the prescribed time after the making of the order, direct the order to apply to the separate debts and properties of the partners or debtors, or of some or one of them, and such order shall have effect accordingly: Provided that nothing herein shall prejudice or affect any disposition made by a debtor in good faith and for valuable consideration, of or in reference to the separate property to which such provisional order is so directed to apply, in the interval between the date of the provisional order and the date when such direction has been given. 146. Creditor of partners may prove for certain purposes his claims in proceedings against one partner 146. When a provisional order is made against one member of a firm or partnership, any creditor to whom that partner is indebted jointly with the other partners of the firm, or any of them, may prove his debt for the purpose of voting, and may vote at a meeting of creditors. 147. Trustee’s right of action when debtor is a member of a firm 147. (1) Where the debtor is a member of a partnership, the Trustee administering his estate under this Law may, when authorised by the Court, bring or prosecute any action in the name of himself and of the debtor’s partner. (2) In such case any release by such partner of the debt or demand to which the action relates shall be void. (3) Before applying to the Court for authority to bring such action the Trustee shall give notice to the partner, who may show cause against it, and on his application the Court may, if it thinks fit, direct that he shall receive his proper Page 56 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 148 share of the proceeds of the action, and shall, if no benefit be claimed by him therefrom, be indemnified against costs in respect thereof as the Court directs. 148. As to debtor’s joint contracts 148. Where a debtor is a contractor in respect of any contract jointly with any other person or persons, such person or persons may be sued, and, if no action be pending at the suit of the Trustee in respect thereof, may sue in respect of such contract without the joinder of the debtor. 149. Provisional order when a member of a firm is absent or of unsound mind 149. (1) When a provisional order has been made against a member or members of a firm, and any one or more other persons, being a member or members of the same firm, is or are out of the Islands, or of unsound mind, the Court shall have jurisdiction, after giving the prescribed notices, to make a provisional order for the administration of the joint property of the members of the firm, on its being proved to the satisfaction of the Court that the firm is unable to pay its debts, but it shall not be lawful to adjudge any member a bankrupt under this section. (2) Upon such order being made, the property of the firm shall vest in the Trustee, and shall be administered in all respects as if a bankruptcy petition had been presented and a provisional order had been made in the first instance against all members of the firm. PART XXIII - Discovery Of Debtor’s Property 150. Power of Court to summon debtor and other persons, to require production of documents as to debtor’s affairs 150. At any time after the presentation of a petition, the Court may summon before it the debtor, his wife or any person known or suspected to have in his possession any of the property of the debtor, or supposed to be indebted to the debtor, or any person whom the Court may deem capable of giving information respecting the debtor or his property, trade, dealings or affairs, and the Court may require any such person to produce any documents in his custody or power relating to the debtor, or his property, trade, dealings or affairs; and if any person so summoned, after having been tendered a reasonable sum, refuses to produce such documents, having no lawful impediment made known to the Court at the time of its sitting and allowed by it, the Court may, by warrant, cause such person to be apprehended and brought before it for examination. c Revised as at 2nd day of September, 1997. Page 57 Section 151 Bankruptcy Law 151. Examination of witnesses 151. The Court may examine upon oath, either by word of mouth or by written interrogation any person so summoned or brought before it, or any person being present before the Court, concerning the debtor or his property, trade, dealings or affairs. 152. Court may order payment of admitted debt 152. (1) If any person, on examination before the Court, admits that he is indebted to the debtor, the Court may, on the application of the Trustee, order him to pay the Trustee, at such time and in such manner as to the Court seems expedient, the amount admitted, or any part thereof, either in full discharge of the whole amount in question or not, as the Court thinks fit, with or without costs of the examination. (2) If any person, on examination before the Court, admits having in his possession any property of the debtor vested in the Trustee under this Law, the Court may, on the application of the Trustee, grant a warrant for the seizure of the same: Provided that, if on such examination as aforesaid, such person claims a lien on such property, such warrant shall authorise the seizure of the same only on satisfaction of such lien. 153. Power to seize debtor’s property, and to search for same 153. Any person acting under warrant of the Court may seize any property of the debtor divisible amongst his creditors under this Law and in the debtor’s custody or possession, or in that of any other person, and with a view to such seizure may break open any house, building or room of the debtor where the debtor is supposed to be or any building or receptacle of the debtor where any of his property is supposed to be;

and where the Court is satisfied that there is reason to believe that the property of the debtor is concealed in a house or place not belonging to him the Court may, if it thinks fit, grant a search warrant to any constable or prescribed officer of the Court, who may execute the same according to the tenor thereof. 154. Arrest of debtor in certain events 154. At any time after the presentation of a petition — (a) if it appears to the Court that there is probable reason for believing that the debtor is about to leave the Islands, or to quit his place of residence with a view of avoiding examination in respect of his affairs, or otherwise delaying or embarrassing the proceedings under the petition, or that he is about to remove his property with a view of preventing or delaying such property being placed under the control or possession of the receiver or Trustee, or that he has concealed or is about to conceal or Page 58 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 155 make away with any of his property, or any books, documents or writings which might be of use to his creditors in the course of the proceedings; or (b) if the debtor, knowing that a petition has been filed, removes any property in his possession above the value of ten dollars, without the leave of the receiver or Trustee, or, without good cause shown, fails to attend any examination ordered by the Court, the Court may cause the debtor to be arrested and imprisoned in such convenient prison as the Court may direct, and any books, papers or property in his possession to be seized and safely kept until such time as the Court may order. 155. Dealing with letters addressed to debtor 155. The Court, upon the application of the Trustee, may, from time to time, order that for such time as the Court thinks fit, not exceeding three months from the date of such order, post letters addressed to the debtor at any place or places mentioned in the order, shall be re-directed by the Postmaster-General or officers acting under him, to the Trustee or otherwise as the Court directs, and the same shall be done accordingly. PART XXIV - Orders And Warrants Of Court 156. Enforcement of warrants and orders of Courts 156. All the Courts in bankruptcy and the officers of such Courts shall act in aid of and shall be auxiliary to each other in all matters of bankruptcy, and any order of any one Court in a proceeding in bankruptcy may, on application to another Court, be made an order of such other Court and be carried into effect accordingly. An order of any Court in bankruptcy seeking aid, together with a request to another of the said Courts, shall be deemed sufficient to enable the latter Court to exercise, in regard to the matters directed by such order, the like jurisdiction which the Court that made the request, as well as the Court to which the request is made, could exercise in regard to similar matters within their respective jurisdictions. 157. Warrants of Bankruptcy Court 157. Any warrant of the Court under this Law may be executed in any part of the Islands in the same manner and subject to the same privileges in, and subject to which a warrant issued by any Justice against a person for an indictable offence may be executed; and any search warrant issued by the Court under this Law for the discovery of any property of a bankrupt may be executed in manner prescribed or in the same manner and subject to the same privileges, in and subject to which a search warrant for property supposed to be stolen may be executed according to law. c Revised as at 2nd day of September, 1997. Page 59 Section 158 Bankruptcy Law 158. Committal to prison 158. Where the Court commits any person to prison, the committal may, unless otherwise prescribed, be to such convenient prison as the Court thinks expedient; and if the gaoler of any prison refuses to receive any prisoner so committed, he shall be liable, for every such refusal, to a penalty of two hundred dollars. PART XXV - Evidence 159. Certified copies of entries in Trustee’s books 159. Copies, authenticated by the signature of the Trustee, of any entries in the books kept by him with respect to any estate or trust vested in or administered by him under this Law shall be admissible in evidence, and shall have the same effect in evidence in all respects as the originals from which such copies were made. 160. Signature of Trustee 160. In all legal proceedings judicial notice shall be taken of the signature of the Trustee; but any Court or Judge may require such signature to be proved in the ordinary way if it is doubtful to such Court or Judge whether the alleged signature is genuine. 161. Evidence of documents in proceedings under this Law 161. Any bankruptcy petition or copy thereof, any order or copy of an order made by the Court, any certificate or copy of a certificate made by the Court, any deed of arrangement or copy thereof, and any other instrument or copy of an instrument, affidavit or document, made or used in the course of any proceedings under this Law, may, if any such document, instrument or copy appears to be sealed with the seal of the Court, purports to be signed by the Judge or certified to be a true copy by the Clerk of the Court, be receivable in evidence in all legal proceedings whatever. 162. Depositions of deceased persons 162. In the case of the death of the debtor, his wife or of a witness whose evidence has been received by the Court in any proceedings under this Law, the deposition of the person so deceased purporting to be sealed with the seal of the Court, or a copy thereof purporting to be so sealed, shall be admitted as evidence of the matters therein deposed to. 163. Gazette notice conclusive evidence of certain facts 163. The production of a Gazette containing a notice of a provisional order, or of an absolute order for bankruptcy, shall be conclusive evidence in legal proceedings that the provisional order was duly made or that the debtor against whom the absolute order has been made has been adjudged bankrupt, and also of the date of such orders. Page 60 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 164 PART XXVI - Legal Proceedings 164. Service on Trustee 164. Documents in any legal or other proceedings by or against the Trustee may be served by being left at his office, and such service shall have the same effect as if it had been made personally. 165. Notice of action against Trustee 165. No action or other proceeding shall be commenced against the Trustee as such, unless one month’s notice stating the cause thereof, the name and address of the person bringing the action or other proceeding, and the name and address of his attorney-at-law, if any, has been given to the Trustee, and if no action or proceeding has been commenced against the Trustee in terms of such notice before the expiration of sixty days from the service thereof the notice shall lapse and cease to be effective. 166. Exemptions from stamp duty 166. Every deed, conveyance, assignment, surrender, admission or other assurance, relating solely to freehold or leasehold property, or to any mortgage, charge or other encumbrance on, or any estate, right or interest in, any real or personal property which is part of the estate of any debtor under this Law, and which, after the execution of such deed, conveyance, assignment, surrender, admission or other assurance, either at law or in equity, is or remains the property of the debtor or Trustee, and every power of attorney, proxy, paper, writ, order, certificate, affidavit, bond or other instrument or writing, relating solely to the property of any such debtor, or to any proceeding under this Law, shall be exempt from stamp duty (except in respect of fees under this Law). 167. Irregularities not to invalidate proceedings 167. Proceedings under this Law shall not be invalidated by any irregularity, unless the Court before which an objection is made to such proceeding is of opinion that substantial injustice has been caused by such defect or irregularity, and that such injustice cannot be remedied by any order of such Court. 168. Action in respect of debtor’s things in action assigned 168. Any person to whom any thing in action belonging to the debtor is assigned under this Law may bring or defend any action relating to such thing in action in his own name. c Revised as at 2nd day of September, 1997. Page 61 Section 169 Bankruptcy Law PART XXVII - Apprenticeship 169. Discharge of indenture of apprentice of debtor and preferential allowance thereon 169. Where, at the time of the presentment of the bankruptcy petition, any person is apprenticed or an articled clerk to the debtor, the provisional order shall, if either the debtor, apprentice or clerk give notice in writing to the Trustee or receiver to that effect, be a complete discharge of the indenture of apprenticeship or articles of agreement; and if any money has been paid by or on behalf of such apprentice or clerk to the debtor as a fee, the Trustee or receiver may, on the application of the apprentice clerk or of some person on his behalf, pay such sum as such Trustee or receiver, subject to an appeal to the Court of Appeal, thinks reasonable, out of the debtor’s property, to or for the use of the apprentice or clerk, regard being had to the amount paid by him or on his behalf, and to the time during which he served with the debtor under the indenture or articles before the date of the provisional order, and to the other circumstances of the case. PART XXVIII - Annulling Or Revoking Of Orders In Bankruptcy 170. Power to revoke orders, etc., effect thereof 170. (1) The Court may, at any time, for sufficient reason, revoke a provisional order for bankruptcy or annul an adjudication; but in such case all sales and dispositions of property and payments duly made, and all acts theretofore done by the Trustee, any person acting under his authority or the Court, shall be valid, but the property of the debtor shall, in such case, vest in such person as the Court may appoint, or in default of any such appointment revert to the debtor for all his estate or interest therein, upon such terms and subject to such conditions, if any, as the Court may declare by order. (2) A copy of the order of revocation or annulment, unless such order has been made on cause shown by the debtor in the first instance, may be forthwith published in the Gazette, and advertised locally in the prescribed manner, and the production of a copy of the Gazette containing such order of revocation or annulment shall be conclusive evidence of the fact of such revocation or annulment, and of the terms of the order. 171. Effect of revocation of a provisional order 171. The revocation of a provisional order shall operate as a revocation of the appointment of the Trustee under the petition, and shall revive the remedy of any creditor against the property or person of the debtor that was suspended or stayed by the order. Page 62 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 172 PART XXIX - Offences 172. Offences 172. Any person against whom a provisional or absolute order in bankruptcy has been made and not revoked shall be guilty of an offence and liable on conviction to imprisonment for one year if — (a) he does not to the best of his knowledge and belief fully discover to the Trustee administering his estate for the benefit of his creditors all his property, real and personal, and how, to whom and for what consideration, and when he disposed of any part of his property except such part as has been disposed of in the ordinary way of his trade, if any, or laid out in the ordinary expense of his family; (b) he does not deliver up to the Trustee, or as he directs, all such part of his real and personal property as is in his custody or under his control and which he is required by Law to deliver up, unless the jury is satisfied that he had no intent to defraud; (c) he does not deliver to the Trustee, or as he directs, all books, documents, papers and writings in his custody or under his control, relating to his property or affairs, unless the jury is satisfied that he had no intent to defraud; (d) since the presentation of the petition by or against him or within six months before such presentation, he has concealed or removed any part of his property to the value of twenty dollars or upwards or concealed any debt due to or from him, unless the jury is satisfied that he had no intent to defraud; (e) he makes any material omission in any statement required under this Law relating to his affairs, unless the jury is satisfied that he had no intent to defraud; (f) knowing or believing that a false debt has been proved by any person under the bankruptcy proceedings, he fails for the period of a month to inform the Trustee thereof, unless the jury is satisfied that he had no intent to defraud; (g) after the presentment of the petition by or against him, he prevented the production of any book, document, paper or writing, affecting or relating to his property or affairs, unless the jury is satisfied that he had no intent to conceal the state of his affairs or to defeat the Law; (h) after the presentment of the petition, or within six months before such presentment, he has concealed, destroyed, mutilated or falsified, or has been privy to the concealment, destruction, mutilation or falsification of any book or document affecting or relating to his property or affairs, c Revised as at 2nd day of September, 1997. Page 63 Section 172 Bankruptcy Law unless the jury is satisfied that he had no intent to conceal the state of his affairs or to defeat the Law; (i) either before or after the presentment of the petition, he made or was privy to the making of any false entry in any book or document affecting or relating to his property or affairs, unless the jury is satisfied that he had no intent to conceal the state of his affairs or to defeat the Law; (j) after the presentment of the petition, or within six months before such presentment, he has parted with, altered or made omission in, or has been privy to parting with, altering or making any omission in, any document affecting or relating to his property or affairs, unless the jury is satisfied that he had no intent to defraud; (k) after or within six months before the presentment of the petition he has attempted to account for any part of his property by fictitious losses or expenses; (l) within six months before the presentment of the petition he, by any false representation or other fraud, has obtained any property on credit, and has not paid for the same; (m) within six months before the presentment of the petition he obtained, under the false pretence of carrying on business and dealing in the ordinary way of his business, any property on credit, and has not paid for the same, unless the jury is satisfied that he had no intent to defraud; (n) within six months before the presentment of the petition, he has pawned, pledged or disposed of otherwise than in the ordinary way of his business any property which he had obtained on credit and had not paid for, unless the jury is satisfied that he had no intent to defraud; (o) he is guilty of any false representation or other fraud for the purpose of obtaining the consent of his creditors, or any of them, to any agreement with reference to his affairs, or his bankruptcy or liquidation; (p) after or within six months before the presentment of the petition, he has quitted the Islands and taken with him, or attempted or made preparation for quitting the Islands and for taking with him any part of his property to the amount of forty dollars or upwards, which would, by law, be divisible amongst his creditors under the bankruptcy, unless the jury is satisfied that he had no intent to defraud; (q) in incurring any debt or liability, he has obtained credit under false pretences, or by means of any other fraud; (r) he has, with intent to defraud his creditors, or any of them, made or caused to be made any gift, delivery or transfer of, or any charge on, his property; or Page 64 Revised as at 2nd day of September, 1997. c Bankruptcy Law (1997 Revision) Section 173 (s) he has, with intent to defraud his creditors, concealed or removed any part of his property since, or within two months before, the date of any unsatisfied judgment or order for payment of money obtained against him. 173. Undischarged bankrupt obtaining credit to extent of forty dollars without informing creditor of his bankruptcy guilty of an offence 173. An undischarged bankrupt who has been adjudged bankrupt under this Law who obtains credit to the extent of forty dollars or more from any person without informing such person that he is an undischarged bankrupt is guilty of an offence and liable on summary conviction to imprisonment for two years. Note (not forming part of the Law): In Notice dated the 22nd April, 1980 and signed by the Clerk of the Executive Council published in Gazette No. 9 of 5th May, 1980, it was stated that under section 12 of the Law the person for the time being holding the office of Clerk of the Courts had been appointed by the Governor in Council to be a Trustee in Bankruptcy. Publication in revised form authorised by the Governor in Council this 2nd day of September, 1997. Carmena H. Parsons Clerk of Executive Council c Revised as at 2nd day of September, 1997. Page 65