Property in bankrupt''s reputed ownership, Financial Accounting

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PROPERTY IN BANKRUPT'S REPUTED OWNERSHIP

The trustee may claim property owned by third parties which is in the bankrupt's possession at the commencement of the bankruptcy if:

1.    The property consists of goods or business debts;
2.    In the sole possession, order or disposition of the bankrupt at the commencement of the bankruptcy;
3.    For use in his trade or business;
4.    With the consent of the true owner;
5.    In such circumstances that the debtor was the 'reputed owner' of the goods.

The trustee's claim may be defeated by evidence of a trade custom of possession of such goods without ownership; in view of the prevalence of hire purchase and similar agreements, this clause now seems to have little practical importance.


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