If you are a creditor of an insolvent company or a bankruptcy, Oliver Elliot can explain how Section 311 of the Insolvency Act 1986 can help. We Know Insolvency Inside Out.
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Use Of Section 311 of the Insolvency Act 1986
A Trustee in Bankruptcy can use Section 311 of the Insolvency Act 1986 to investigate a bankrupt’s financial affairs.
Section 311 of the Insolvency Act 1986 enables the Trustee in a bankruptcy case to acquire control of the bankrupt’s property such as his books and records, including documents that are privileged. Section 311, 312, 333 and 366 of the Insolvency Act 1986 are all interlinked.
Mandatory Character Of The Section
The Section has mandatory characteristics because it would be unusual for the Insolvency Practitioner to be unable to take into his or her possession all and any relevant property of the Bankrupt.
The Section In The Legislation
The Section applies in a bankruptcy case.
Section 311 of the Insolvency Act 1986: Acquisition by trustee of control
(1)The trustee shall take possession of all books, papers and other records which relate to the bankrupt’s estate or affairs and which belong to him or are in his possession or under his control (including any which would be privileged from disclosure in any proceedings).
(2)In relation to, and for the purpose of acquiring or retaining possession of, the bankrupt’s estate, the trustee is in the same position as if her were a receiver of property appointed by the High Court; and the court may, on his application, enforce such acquisition or retention accordingly.
(3)Where any part of the bankrupt’s estate consists of stock or shares in a company, shares in a ship or any other property transferable in the books of a company, office or person, the trustee may exercise the right to transfer the property to the same extent as the bankrupt might have exercised it if he had not become bankrupt.
(4)Where any part of the estate consists of things in action, they are deemed to have been assigned to the trustee; but notice of the deemed assignment need not be given except in so far as it is necessary, in a case where the deemed assignment is from the bankrupt himself for protecting the priority of the trustee.
(5)Where any goods comprised in the estate are held by any person by way of pledge, pawn or other security and no notice has been served in respect of those goods by the official receiver under subsection (5) of section 285 (restriction on realising security), the trustee may serve such a notice in respect of the goods; and whether or not a notice has been served under this subsection or that subsection, the trustee may, if he thinks fit, exercise the bankrupt’s right of redemption in respect of any such goods.
(6)A notice served by the trustee under subsection (5) has the same effect as a notice served by the official receiver under section 285(5).
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