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Homework answers / question archive / Bankruptcy is a situation where the court of law has declared the insolvency of a person or entity and passed orders for its resolution
Bankruptcy is a situation where the court of law has declared the insolvency of a person or entity and passed orders for its resolution. In 2001 Barbados' Bankruptcy Act (Cap. 303) was repealed and replaced by the " Barbados Bankruptcy and Insolvency Act 2001".
What is meant by "receiving order' and outline its purpose?
ANSWER: -
RECEIVING ORDER: -
RECEIVING ORDER MEANS AN ORDER PASSED BY COURT THAT PROVIDES FOR OR AUTHORISES THE APPOINTMENT OF A RECEIVER OR A RECEIVER MANAGER.
ON A RECEIVER ORDER BEING MADE, THE COURT SHALL APPOINT A LICENSED TRUSTEE OF THE PROPERTY OF THE BANKRUPT, HAVING REGARD, AS FAR AS THE COURT DEEMS JUST, TO THE WISHES OF THE CREDITORS.
PURPOSE: -
1. WHEN A RECEIVING ORDER IS MADE, IT MEANS THAT THE COURT APPOINTS THE OFFICIAL RECEIVER TO TAKE CHARGE OF THE DEBTOR'S ESTATE.
2. THE DEBTOR IS NOT IMMEDIATELY ADJUDGED A BANKRUPT, BUT AS SOON AS MAY BE AFTER MAKING A RECEIVING ORDER, A GENERAL MEETING OF CREDITORS IS HELD TO CONSIDER WHETHER A PROPOSAL FOR A COMPOSITION OR SCHEME OF ARRANGEMENT SHALL BE ENTERTAINED, OR WHETHER HE SHALL HE ADJUDGED BANKRUPT.
3. AFTER A RECEIVING ORDER HAS BEEN MADE, A CREDITOR CANNOT BRING ANY ACTION AGAINST THE DEBTOR UNLESS UNDER SANCTION OF THE COURT, BUT A CREDITOR'S POWER TO DEAL WITH ANY SECURITIES HE MAY HAVE IS NOT AFFECTED BY THE RECEIVING ORDER.
