Disclaimer of assets, Business Law and Ethics

DISCLAIMER OF ASSETS:

The liquidator has a statutory right of disclaimer of assets: s.135.  The rules are:

(a)     he must obtain leave of the court;

(b)     the right of disclaimer is limited to property of the following kinds:-

     i.       land burdened with onerous covenants;

     ii.       shares;

     iii.       unprofitable contracts;

     iv.       other property which is difficult to sell because of the burdens attached to it;

(c)     the liquidator must disclaim within a period of 12 months (unless the court extends the period).  The period is reckoned from commencement of winding up or the data when the liquidator became aware of the property if this was more than one month after that commencement.  Moreover, the other party may serve on the liquidator a notice requiring him within 28 days to state whether he intends to disclaim.  If the liquidator does not within that period declare an intention of disclaimer he losses the right to do so;

(d)    any person who suffers loss by the disclaimer becomes a creditor of the company for the amount of his loss.  If the property disclaimed is a lease which has been mortgaged or sub-let the court may vest the property disclaimed in the mortgagee or sub-lessee.

Posted Date: 1/15/2013 5:16:55 AM | Location : United States







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