Summary
Summary Law of insolvency: About the Trustee of an insolvent estate
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Comprehensive notes summarised from the Hockley's Insolvency Textbook
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Topic 9: The Trustee1. Election and appointment
S40(1) of Insolvency Act
- Master must give notice to creditors to attend the first meeting of creditors
At first meeting
- Creditors must prove their claims against estate
- Must elect trustee
Election of trustee
- Governed by s54 of IA
S54(1) of Insolvency Act
- Creditors who have proved their claims against estate
o May elect 1 or 2 trustees by voting
S54(2): Person who must be elected as trustee
- Person who obtains majority in number and majority in value of the votes
S54(4): Defines these terms
Majority of the votes in number refers to
o Greatest number of votes
Majority of the votes in value
o Refers to votes representing claims of the greatest combined value
S54(3)(a): If none of nominated parties obtains such a majority of votes
Who will be elected as trustee then? Can be either
- Person who obtains the majority of votes in number
o when no other person obtains the majority of votes in value
- person who obtains he majority of votes in value
o when no other person obtains majority of votes in number
s54(3)(b): Both must be elected as trustees if
- X obtains a majority of votes in number
- Y obtains majority of votes in value
S56(1): Election will not be valid if
- Trustee elected at meeting of creditors where the Master did not preside
Election can be validated if
- Master confirms such election
- Confirmation will amount to official appointment as trustee
S56(2): Master must confirm election if
- Person elected gives Master the required security for the proper performance of his duties as trustee
- Confirmation will amount to official appointment as trustee
o He will then receive a certificate of appointment from Master
S56(3): Upon receiving this certificate
- Trustee must make public notification of his appointment in Government Gazette
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