(a) In relation to each type of insolvency procedure available in the legal system of this economy, what types of claims of creditors are properly admissible for payment in the context of that procedure? (for example liquidated debts, future debts, contingent claims, secured claims, unliquidated claims for damages, interest claims, costs of administration or of legal proceedings, periodical payments, debts owed by guarantors of the business organization.)

In a winding up all debts, payable on a contingency and all claims against the company, present or future, certain or contingent, ascertained or sounding only in damages are admissible to proof against the company (Sec.403).

In all other formal insolvency proceedings all claims against the company, secured or unsecured are admissible to proof.

(b) At what date are the amounts of admissible debts computed?

 

Winding Up- as on the date on which petition for winding up is filed.

Receiver/Administrator- as on the date on which payment is to be made.

Suit for recovery- as at the date of the order.

(c) By what method are claims of creditors proven by those creditors in the context of each type of insolvency procedure?

 

Documentary or oral evidence.

(d) How are disputed claims made by creditors adjudicated upon? (for example by the administrator, or by a Court.)

 

By the liquidator in a creditors voluntary winding up, otherwise by the Court.

(a) In relation to each type of insolvency procedure available in the legal system of this economy, what principles apply to the division of available assets of the corporate debtor among those of its creditors entitled to payment? Is there a basic principle of equality of payment, or are rights of priority of payment enjoyed by secured creditors, or by certain classes of creditors over others? (for example costs of the administration, claims for taxes owed by the debtor, amounts owed to employees of the organization.)

Winding up- Secured creditors can stand outside the liquidation proceedings and can rely upon their security or a decree, if they have obtained one provided leave to proceed has been obtained from the Court. In a creditors voluntary winding up all costs, charges and expenses incurred in the winding up including the remuneration of the liquidator shall after settlement of secured debts be paid out of the assets of the company in priority to all other claims (Sec.393). Thereafter, the following preferential payments have priority over other debts:

(a) revenues, taxes, cesses, rates and dues from the company to any governmental authority.

(b) all wages and salary for employees for a period not exceeding four months and any compensation payable to any workman under any law.

(c) all accrued holiday remuneration payable to any employee.

(d) insurance contributions

(e) amounts due in respect of any compensation or liability to any workman.

(f) sums due to any employee from a provident fund, pension fund or gratuity.

(g) expenses of any investigation into the affairs of the company (Sec.405).

In all other formal insolvency proceedings, once secured creditors have been paid all other creditors rank equally.

(b) Give a brief account of the order of priorities, if any, of payment of creditors prescribed by the legal system of this economy.

 

Once secured creditors have been satisfied, all other creditors rank equally.