When an individual is declared bankrupt, the Official Receiver and/or the Trustee in bankruptcy have very wide statutory powers to investigate assets it is believed the bankrupt owns.
- Summoning the bankrupt to examination at Court
- Summoning other individuals who are believed to have relevant information for examination in Court
- Obtaining information/documentation relevant to the bankrupt’s estate and affairs, from the Bankrupt and third parties, irrespective of the Data Protection laws that would usually apply
- Obtaining the full files of solicitors, accountants and other advisors who previously acted for the bankrupt, irrespective of the client privilege which would usually prevent such disclosure
- Obtaining a Court warrant to forcefully seize property comprised in the bankrupt’s estate or any books, papers or records relating other bankrupt’s estate or affairs, whether the bankrupt or a third party is in possession of such items
- Obtaining a Court warrant for the arrest of the bankrupt, to prevent the bankrupt absconding from the county, removing his assets, destroying his assets or where he has failed to attend any examination ordered by the Court
Irwin Mitchell’s Sheffield insolvency team are currently acting for a Trustee in bankruptcy on a high value case in which it was thought that the bankrupt was concealing assets and paperwork relating to an offshore trust fund, at a well known storage facility chain. The Trustee’s suspicions arose following a review of the bankrupt’s bank statements, which showed payments to the storage facility.
At short notice the team obtained a Court Order against the storage facility, for delivery of the items. The storage facility felt unable to comply with the Court Order due to its own contractual duties to the bankrupt, and as such the Court granted the Trustee a warrant to forcefully break open the storage facility and recover the items.
The High Court’s Tip Staff were duly instructed to carry out the break in within hours of the Court Order being granted, and injunctive relief was obtained against the storage facility to prevent it ‘tipping off’ the bankrupt of the break in, before the Trustee could seize the items.
This is just one example of how the Trustee’s wide powers can be used to investigate and realise assets for the benefit of the creditors of the bankrupt.
Tom Paton, Solicitor, Insolvency Team, Irwin Mitchell, Sheffield