Administration and Distribution of assets of the Bankrupt

Suppose a Thane trader is declared bankrupt. The day before he applied, he transferred his shop to his brother for a token sum and paid one friendly creditor in full. Now the trustee stands in his shoes and wants to know: what belongs to the estate, what can be pulled back, and who gets paid first from whatever is gathered? Chapter V of Part III answers all three. It is the engine room of bankruptcy, where the estate is identified, enlarged, cleaned of unprofitable burdens and divided.

In two minutes

Once the estate vests in the bankruptcy trustee (ss.154–155), he investigates, realises and distributes it (s.149), can avoid undervalued, defrauding, preferential and extortionate transactions (ss.164–167), and pays debts in the order fixed by s.178.

The rest of this chapter

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