This article explains why a Trustee in Bankruptcy is entitled to a Bankrupt’s Papers.
Section 311(1) of the Insolvency Act 1986 instructs the Trustee in Bankruptcy to obtain the Bankrupt’s papers:
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).
Trustee’s Entitlement To A Bankrupt’s Papers
An individual who is Bankrupt has to produce to the Trustee in Bankruptcy their books, papers and records.
The same includes documents held in electronic form.
Legal Papers Of A Bankrupt
Records of a Bankrupt include legal papers and documents evidencing engagement and communications with lawyers and advisers. The Trustee is entitled to the same on a largely unfettered basis in the normal course of events subject to the rules on deployment due to consideration of matters of legal and professional privilege.
The title to such documents will often be the property of the Bankruptcy Estate but not in all cases by any means.
However, when someone owns the property they do not need to justify a demand for possession of the same. If the property is to be refused then the burden shifts to the party that is not compliant with an obligation to produce the same to the person entitled to the said possession.
In any event, a Trustee enters office as a stranger to the affairs of the Bankruptcy and as such, it is the duty of the bankrupt to volunteer information.
Cost To The Bankruptcy Estate Of Review Of The Records
Concern about the costs of providing the papers and or their review by the Trustee in Bankruptcy is not a matter for the Bankrupt to directly regulate by refusing to supply the papers to the Trustee. The obligation is still to produce the same to the Trustee in Bankruptcy.
The process through which a Bankrupt might challenge the costs of the Trustee in Bankruptcy in a review of such papers is not through a refusal to comply with the obligation to produce the same; it is if the Bankrupt has legal ‘standing‘ to then apply to challenge the costs and expenses of the review of the papers.
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Disclaimer: Trustee in Bankruptcy Entitled To Bankrupt’s Papers
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