ABSTRACT

This Part of the text is concerned with the rights of the creditors of bankrupts and insolvent companies in liquidation. By definition, there will be insufficient funds available for all creditors to be paid in full. Chapter 25 explains the effect of bankruptcy and liquidation on the rights of the creditors; in particular, it will be seen that the individual rights of unsecured creditors to pursue the debtor are converted to a right to participate in the collective administration of the insolvent’s assets. Secured creditors and those with other proprietary interests are relatively immune to the insolvency of the debtor; Chapter 29 deals with the circumstances in which the security may be challenged and it will be seen from Chapter 34 that floating charges are postponed to the preferential creditors. Chapter 33 explains some other sources of funds available to employees and those whose claims against the insolvent have been insured.