Proof of debts, Business Law and Ethics

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PROOF OF DEBTS:

                                      Many of the rules of bankruptcy apply to the discharge of the company's debts: s.310.  The liquidator must obviously require satisfactory evidence that a creditor's claim is properly admissible as a liability.  This is done (where necessary) by a procedure for "proof of debts".

If the company is solvent every kind of debt which is legally enforceable may be admitted.  If it is insolvent unliquidated claims in tort are not admissible.  But the injured party may be permitted to bring an action against the company in tort so that his claim may be converted by the award of damage into a liquidated sum so long as it is liquidated when the claimant comes into prove.


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