Deeds of arrangement-bankruptcy and liquidation, Financial Accounting

Assignment Help:

DEEDS OF ARRANGEMENT (D of A)

1. Nature of a D of A:

To avoid the expense and delay involved in a bankruptcy, a debtor in trouble may make a private arrangement with the creditors to accept payment of a smaller sum of money in full discharge of their debts before a bankruptcy petition has been presented. 

2. Registration of a D of A and assent of creditors:
A D of A will be void unless it is registered with the Registrar within 7 clear days after first execution and is properly stamped (DAA s.4).

Within 21 days after registration a deed for the benefit of creditors generally must be assented to by a majority in number and value of the creditors concerned

3. Effect of bankruptcy:
A D of A made for the benefit of creditors generally will be an act of bankruptcy and therefore a bankruptcy petition may be presented against the debtor within 3 months of its execution by a creditor who has not assented to the D of A (but if such creditor has been served by the trustee under the D of A with a notice of the execution of the D of A the time is reduced to 1 month). 

4. Appointment of trustee:
The trustee is nominated by the parties to the deed and, his appointment is made and his remuneration fixed by the deed. 

5. Trustee's security:
Within 7 days from the filing of the declaration of assent by the requisite creditors, the trustee of a D of A for the benefit of creditors generally must give security to the local bankruptcy registrar in a sum equal to the estimated assets available for distribution among the unsecured creditors

6. Trustee's accounts and audit:
A Trustee under a D of A must account annually to the Official Receiver and every 6 months to all assenting creditors.  A majority in number and in value of creditors can demand an audit during the administration or within 12 months from the rendering of the final accounts to the O.R.

7. Trustee's duties in administering the D of A:
To carry out the trusts of the D of A and to distribute the property assigned to him in accordance with the provisions of the D of A.

8. Discharge of trustee:
The trustee is automatically discharged as soon as he has carried out his duties under the D of A — he does not have to obtain a formal release.


Related Discussions:- Deeds of arrangement-bankruptcy and liquidation

Ratio analysis, This subject has really beeen difficult for me. This is, by...

This subject has really beeen difficult for me. This is, by far, the most challenging assignment I have had to deal with. Please help! If someone can do it for me, that would be ev

Annulment of order-adjudication of debtor, Annulment of order The order...

Annulment of order The order may be annulled if In the opinion of the court the debtor ought not to have been adjudicated bankrupt; All the debts have been paid in fu

Committee of inspection-bankruptcy, COMMITTEE OF INSPECTION Appointme...

COMMITTEE OF INSPECTION Appointment : A committee of inspection may be appointed by the creditors at their first or any subsequent meeting to supervise the trustee.

What do you mean by auditors report, Q. What do you mean by Auditors Report...

Q. What do you mean by Auditors Report? Auditors' Report - Written communication issued by an independent CERTIFIED PUBLIC ACCOUNTANT (CPA) describing the character of her or h

Light-gauge aluminum, Tampa Foundry began operations during the present yea...

Tampa Foundry began operations during the present year, manufacturing several products for industrial use. One such product is light-gauge aluminum, which the company sells for $36

What amount of loss, On January 1, 2011, Doty Co. redeemed its 15-year bond...

On January 1, 2011, Doty Co. redeemed its 15-year bonds of $2,500,000 par value for 102. They were originally issued on January 1, 1999 at 98 with a maturity date of January 1, 201

What do you mean by suspense account, Q. What do you mean by suspense accou...

Q. What do you mean by suspense account? How are errors in accounting classified? Suspense account: A suspense account is an account, which is opened when the trail balance does

Revenues and production budget, The assignment requires a significant part...

The assignment requires a significant part of the work to be done in a spreadsheet. I have not nominated any particular vendoar or any particular version. The choice is up to you,

What is the break-even sales, If fixed costs are $259,238, the unit selling...

If fixed costs are $259,238, the unit selling price is $112, and the unit variable costs are $63, what is the break-even sales (units)?

Prepare partial income statement through fifo and lifo , Prepare Partial In...

Prepare Partial Income Statement through FIFO, And LIFO Methods The records of XYZ Restaurant Supply include the following accounts for cases of coffee cups at December 31 of t

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd