PROOFS OF DEBT
Where a company is being wound up by the court, or a bankruptcy order has been made, a person claiming to be a creditor and wishing to be repaid all or part of their debt must, subject to any order of the court [Note 1] [Note 2], submit his/her claim in writing to the liquidator, official receiver where acting as receiver and manager, or to the trustee [Note 3] [Note 4].
The proof of debt submitted by a creditor may contain details of more than one class of debt i.e. a debt owed to the claimant as a contributory and a separate debt owed to the claimant as a creditor. A proof of debt may also contain claims in respect of different aspects of a debt arising from the same contract, for instance a claim for arrears and a claim for damages for future losses within one claim.
(Amended July 2010)
The rules governing the matters to be stated in a creditor’s proof of debt were amended as a consequence of the Insolvency (Amendment) Rules 2004. A creditor’s proof, excluding Crown debts (see paragraph 16.68 below), must be in writing (which can include in electronic form, see paragraph 16.71A) and must include the following information:
There is no longer a requirement for a specific form to be completed in order for a proof of debt to be valid in most cases, although statutory forms are available and any proof submitted should be in a substantially similar format [Note 11] [Note 12] [Note 13] [Note 14]. Where a proof of debt is submitted, by an existing trustee, in a later bankruptcy, under section 355 of the Insolvency Act 1986, the proof must be submitted on the statutory form [Note 15] [Note 16] [Note 17].
(Amended July 2010)
The proof of debt must be authenticated by the creditor or a person authorised in that regard [Note 11] [Note 12] [Note 18]. The Insolvency (Amendment) Rules 2010 introduced the concept of ‘authentication’ of documents to facilitate electronic delivery. Rule 12A.9 provides that a paper document is sufficiently authenticated if it is signed by the person sending or supplying the information. A document in an electronic format is sufficiently authenticated if the identity of the sender is confirmed in a way specified by the recipient. If the recipient has not specified how the sender’s identity should be confirmed, the communication is sufficiently authenticated if it is accompanied by a statement of the identity of the sender and the recipient has no reason to doubt the truth of that statement (see paragraph 16.71A).
The authentication may be that of an insolvency practitioner given authority by the creditor to act in relation to a specific case.
Some creditors have recently authorised employees of insolvency practitioner firms to act as proxies on their behalf under a blanket authority. Reference may be made to the OROS Bulletin - Creditors, meetings and dividends http://intranet/OROS/CaseMngment/OROSBulletins/BulletinParts/CreditorsandMeetings.htm and paragraphs 16.105 and 16.106 for further information.
(Amended July 2010)
A proof of debt may be authenticated by means of rubber stamp signature alone, provided that the stamp bears a facsimile of the person’s handwritten signature and was affixed by a person authorised to do so [Note 19]. The official receiver must exercise care in accepting proofs authenticated by this means and should, where it is deemed necessary, attempt to establish that the stamp was affixed by an authorised person.
A document executed in a firm’s name, showing an intention to bind the firm, by a person authorised to do so, is binding on the firm and all the partners of it. If the official receiver has any doubt regarding the acceptability of an authentication in the name of a firm, he/she should seek confirmation of the authority of the authentication from a partner [Note 20].
Where a satisfactory explanation is not available, the official receiver should mark the proof objected to, allow the creditor concerned to vote, and where the vote was via a proxy inform the creditor of his/her action [Note 21] [Note 22]. Authentication in any event need not necessarily be in the space provided and may be elsewhere on the form as long as all relevant details are included.
Within the proof of debt form, a creditor should specify any documents by reference to which the debt can be substantiated, but it is not essential that a creditor attach such documents prior to submission of the proof of debt [Note 23] [Note 24].
Proofs of debt submitted by a Minister of the Crown or a Government Department need not be in the form prescribed by the Insolvency Rules 1986, provided that the proof contains all the information required by the Rules as are relevant in the circumstances (see paragraph 16.64 above) [Note 29] [Note 30]. The most common creditor the official receiver deals with in this regard is HM Revenue and Customs (HMRC).
A proof may be lodged for all the tax liabilities and revenue debts existing at the date of the insolvency order, irrespective of when they are due and payable. In some circumstances, HMRC will need to submit a claim based on incomplete information and/or assessments. Although a proof of debt may be based on an estimated assessment, the tax is legally due and payable on the due date. It is final and conclusive unless an appeal has been made within the statutory 30 day period. Accordingly, it should generally be accepted as part of a claim for voting purposes, but this does not affect the chairman's right to reject proofs of debt not considered to be valid [Note 21] [Note 22].
Where the claim by HMRC appears excessive, it may be possible in some circumstances to request HMRC to reduce the claim upon submission of an affidavit by the bankrupt/directors, or where this is not possible a certificate from the trustee or liquidator may be submitted [Note 31]. Further information regarding proofs submitted by HMRC is available in Chapter 77 paragraphs 77.63 and 77.64), and on the HMRC website http://www.hmrc.gov.uk/manuals/insmanual/ins2307.htm.
In addition to where there is a specific request from a creditor, forms will also be sent to all creditors in cases where;
Where a creditor requests a proof of debt form in writing, a proof of debt form should be sent to the creditor by post. If the request is made by telephone the official receiver should explain to the creditor that the completion of a proof of debt form is unnecessary (if that is the case) but if the creditor nevertheless wishes to do so, he/she may be directed to the supply of proof of debt forms on the Insolvency Service internet site at www.insolvency.gov.uk. Where the creditor is unable or unwilling to access the internet version of the form the official receiver should send a proof of debt form by post [Note 18] [Note 13] [Note 14].
(Amended July 2010)
A proof sent by fax can be accepted for the purposes of a meeting provided the fax is received within the time limits set for the acceptance of proofs of debt [Note 36]. Late proofs should not be admitted for voting (see paragraph 16.74).
In the case of Inland Revenue Commissioners v Conbeer ( BCC 189) it was held that a faxed proxy form was validly signed because when a creditor faxes a proxy to the chairman of a meeting he transmits both the contents of the proxy and his/her signature applied to it. This is similarly applicable to proofs.
The proof will still be considered valid if it is faxed via an intermediary such as an insolvency practitioner, who does not hold an original proof of debt having been instructed by fax or electronic means (see paragraph 16.71A below), as long as that intermediary is duly authorised by the creditor (see also paragraph 16.108 regarding faxed/scanned proxies).
(Amended July 2010)
The IAR 2010 introduced provisions enabling the submission of information to the official receiver, amongst others, by electronic means from 6 April 2010 [Note 37]. These provisions apply to the submission of proofs provided that the following criteria are met [Note 38]:
In addition, the information provided must be authenticated (see paragraph 16.65). To satisfy the requirements for authentication of documents submitted by electronic means, the identity of the sender must be confirmed in a way specified by the recipient. If the recipient has not specified how the sender’s identity should be confirmed, the proof or information is sufficiently authenticated if it is accompanied by a statement of the identity of the sender and the recipient has no reason to doubt the truth of that statement [Note 42].
In practice, a scanned proof of debt containing an original signature and submitted to the official receiver by email can be accepted for the purposes of a meeting provided that the official receiver has no reason to doubt its authenticity. Similarly, a proof received electronically from the creditor or their intermediary, and containing an electronic signature, may be accepted if the named individual can be traced to the originating organisation and is a known party within that organisation.[see ORBS guidance notes http://intranet/DocumentLibrary/CAD/Word/Rules%20Modernisation%201.doc]
Proofs of debt received by the official receiver should be compared with the list of creditors in the preliminary information questionnaire [Note 43] (or statement of affairs if one has been submitted). The amount of the debt per the list of creditors or statement of affairs and the amount per the proof of debt should both be entered on screen 31 of the LOIS database prior to the meeting [Note 13] [Note 14] [Note 16] [Note 18].
There cannot be two proofs in respect of the same debt, where this appears to be the case, steps should be taken to verify the creditor’s true position prior to the meeting and the admission of the proofs for voting purposes.
A guarantor cannot prove in the proceedings unless the creditor is no longer entitled to prove (e.g. because the guarantor has paid him/her in full) [Note 44] (see Chapter 40, paragraph 40.37). This situation with double proofs may also occur where a creditor has assigned (sold) their debt to another in which case the proof of debt lodged by the original creditor should be ignored (see chapter 40, paragraph 40.103).
(Amended July 2010)
Proofs not lodged by the time specified in the meeting notice [Note 45] [Note 46] [Note 47] [Note 48], or where it relates to an adjourned meeting by 12 noon on the business day immediately preceding the meeting [Note 49] [Note 50], cannot be admitted for voting purposes [Note 51] [Note 52]. Prior to 6 April 2010 the chairman had no discretion to allow any exceptions. For post 6 April 2010 petition cases, the chairman has the discretion to allow a creditor to vote, despite the creditor having failed to submit a valid proof on time, if the chairman is satisfied that the failure was due to circumstances beyond the creditor’s control [Note 53] [Note 54].
It is important to note, on every proof received too late for admission, the date and time of receipt. Where the outcome of the meeting would have been affected had the proof and or proxy form been received on time, the chairman has the discretion to adjourn the meeting [Note 55] [Note 56] (see paragraphs 16.41 and 16.52 for further information regarding adjournment of the meeting in these circumstances). Further, it is possible that the chairman may be willing to permit someone who has submitted papers after the deadline to attend the meeting, even though they will be unable to vote.
Proofs without proxies should always be dealt with for the purpose of the meeting. A creditor may attend personally or, if a company, send a representative authorised under the Companies Act [Note 57]. See Part 6 for further information regarding proxies and their validity for voting purposes.
Any proof, which is defective, should normally be returned to the creditor for amendment. However, when there is insufficient time to return a proof for amendment before the meeting, the chairman may, in the absence of any objection from creditors, allow formal errors in proofs to be remedied by the creditor, proxy-holder, or representative attending the meeting and admit the proofs for voting purposes [Note 21] [Note 22].
A proof may, with the agreement of the liquidator or trustee and the creditor, be withdrawn or varied as to the amount claimed [Note 58] [Note 59] [Note 60]. Where an agreement cannot be reached between the liquidator or trustee and the creditor, either party may apply to the court and the court may as a result of such an application expunge the proof or reduce the amount claimed [Note 61] [Note 62].
Where a winding-up order is immediately preceded by an administration, a creditor proving in the administration is deemed to have proved in the winding up proceedings [Note 63].
The chairman of the meeting needs to decide, for each proof of debt submitted whether to admit it or reject it for voting purposes, either in full or with regard to any part of the proof [Note 64] [Note 65]. A decision to accept a creditor’s proof for voting purposes is not binding for other purposes, such as payment of a dividend and further evidence may subsequently be requested in this regard [Note 66].
In Re a debtor (No 222 of 1990), ex parte Bank of Ireland  BCLC 137, Harman J said, with regard to meetings in relation to an individual voluntary arrangement, that the chairman should reject claims that were clearly bad, admit claims that were clearly good and admit claims that were doubtful subject to being marked as objected to. A similar standard of judgement is expected of the chairman in relation to creditors’ meetings.
A proof for a disputed debt should not be admitted for voting purposes if the evidence in support of it is clearly insufficient. If the chairman has any doubt as to whether a proof should be admitted or rejected, he/she should mark it as objected to and allow the creditor to vote, subject to the vote being subsequently declared invalid if the objection to the proof is sustained [Note 67] [Note 68].
Debts for an unliquidated amount or those whose value is not ascertained are dealt with at paragraph 16.92 below. These debts should not be rejected or objected to solely by their nature, in being of an unknown value. The chairman may reject or mark as objected to (either wholly or in part) claims of creditors with such debts for other reasons, such as being statute barred (see paragraph 40.19) or in as far as they relate to costs after the insolvency order date (see paragraph 16.87 below).
(Amended July 2010)
A decision of the chairman in relation to admission or rejection of a proof of debt (either wholly or in part) may be subject to an appeal to the court by any creditor, contributory, or the bankrupt [Note 69] [Note 70]. Such an appeal must be made not later than 21 days after the date of the meeting [Note 71] [Note 72] (in cases where the petition was presented before 6 April 2010 the appeal should be made within 28 days of being notified of the decision by the chairman [Note 73]). The chairman (where the official receiver or a person nominated to act on his/her behalf) is not personally liable for costs in respect of such an application unless the court otherwise orders. The court is not restricted, in considering whether the chairman was right to admit or reject a proof for voting purposes, by the evidence available to the chairman at the meeting and may consider any subsequent evidence that comes to light [Note 74].
Where on appeal the chairman’s decision is reversed or varied, or a creditor’s vote is declared invalid, the court may order that a further meeting be summoned, or make any such other order as it thinks just. The court is likely to have regard to any unfair prejudice suffered by creditors or material irregularities, which may have occurred, in coming to such a decision to reverse a chairman’s decision [Note 75] [Note 76]. Further information regarding the appeals process is detailed in Chapter 6, paragraphs 6.18 and 6.19 (bankruptcy) and paragraphs 6.65 and 6.66 (companies).
(Amended July 2010)
Objections to a proof by the chairman, a creditor or any other interested person (including a bankrupt) should, where possible, be dealt with before the business of the meeting is started. The chairman should make a record of all objections so that if need be he can report fully and accurately to the court.
No proof should be admitted for voting purposes in relation to a non-provable debt [Note 77]. Chapter 40 Part 1, paragraph 40.13 to 40.25 contains details of debts which are not provable, including student loans, postponed debts, fines, post-insolvency debts and statute barred debts.
Any proof of debt submitted for a debt incurred, or payable, in a currency other than sterling should be converted into sterling at the official exchange rate prevailing on the date of the insolvency order (or where a liquidation was immediately preceded by an administration, the rate prevailing on the date that the company entered administration) [Note 78] [Note 79]. For further information see Chapter 40, Part 9, paragraph 40.144.
(Amended July 2010)
Where a debt bears interest the interest is provable as part of the debt except in respect of any period after the commencement of the proceedings (or if a liquidation was immediately preceded by an administration, after the date that the company entered administration) [Note 80] [Note 81] [Note 82]. For further information, see Chapter 40, Part 10.
Any discounts that would have been applicable, but for the insolvency proceedings should be deducted from a creditor’s claim prior to admission for voting purposes, except where such a discount relates to immediate, early or cash settlement terms which have not been met [Note 83] [Note 84].
Any set off applicable as a result of mutual debts, mutual credits or other mutual dealings should be taken in to account prior to admission of a creditor’s claim for voting purposes, the proof of debt being admitted for the balance due [Note 85] [Note 86]. See Chapter 40, Part 2 for further information regarding set off.
Whether costs are a provable debt depends on when and how they were incurred. The discretionary nature of the court’s power to order costs indicates that there is no liability, contingent or otherwise, in the absence of a court order, or a contractual agreement. They are not contingent liabilities for the purpose of proving in insolvency proceedings [Note 87]. See Chapter 40 paragraph 40.18 for further detail. In general costs awarded prior to the commencement of the insolvency proceedings are provable and those awarded after the commencement of insolvency proceedings are not.
A contractual liability to pay costs may result in the creditor having the right to vote, without a court order being required [Note 88]. In the case of Coutts and Co v Passey it was held by Registrar Nicholls, that Passey was liable for Coutts and Co’s litigation costs, from the time of borrowing, due to a contractual overdraft agreement to that effect. The chairman may wish to request a copy of the instrument relied upon in such circumstances and direction to the relevant terms.
Judgment costs should not be admitted for voting purposes unless an office copy judgment (called a certificate of judgment, if obtained in a county court) is produced; photocopies are acceptable. The proof in respect of the judgment debt itself may also be disallowed by the chairman for voting purposes where it appears that there was a fraud or collusion or a miscarriage of justice in it being obtained [Note 89].
An execution creditor may prove for the costs of an execution where the execution took place before the insolvency order. Where the execution takes place after the commencement of a winding up proceedings it is not a provable debt [Note 90], in bankruptcy proceedings execution should not continue after commencement of the bankruptcy in respect of a debt provable in bankruptcy [Note 91]. The enforcement officer may obtain a charge on the assets or deduct his/her costs from realisations, in which case there will no longer be a debt payable or provable [Note 92] [Note 91].
Where the costs of execution exceed the sale or proceeds of the sale, the execution creditor is responsible for discharging the enforcement officer’s costs and may prove in the insolvency proceedings for any such liability incurred, i.e. the enforcement officer is not himself/herself entitled to prove in the insolvency proceedings for any shortfall in his/her costs, but must look to the execution creditor [Note 93]. For further information regarding execution and the processes involved please see Chapter 9, Part 2.
For the purposes of admission to vote at a meeting, a proof submitted by a solicitor for work done on behalf of an insolvent need only be accompanied by a bill of costs, if such a bill has not already been delivered to the insolvent. Additionally the chairman may request such evidence where the claim appears excessive having regard to the statement of affairs or other available information.
A secured creditor should only be admitted for voting purposes for the unsecured balance of their claim. A secured creditor can rely entirely on their security and not submit a proof; surrender their security and prove for the whole amount of the debt [Note 94] [Note 95]; or place a value on his/her security and prove for the balance of their debt [Note 96] [Note 97].
Where a creditor puts a value on his/her security and that security is subsequently realised, the net amount realised shall be substituted for the value previously placed on the security and the creditor will be entitled to prove for the adjusted balance [Note 98] [Note 99]. Further details of secured creditors and valuation of their claims is available in Chapter 40 Part 2 paragraph 40.34 onwards.
If a secured creditor omits to disclose their security in their proof, they can be required to surrender it for the general benefit of creditors, unless the court is satisfied that the omission was inadvertent or the result of an honest mistake [Note 100] [Note 101].
A creditor holding a bill of exchange, a promissory note, cheque, or other negotiable instrument or security upon which the company or bankrupt is liable (see paragraphs 31.5.81 to 31.5.90), should produce it (or a certified copy) before the proof is admitted for voting purposes [Note 102] [Note 103].
A copy of any instruments produced should be taken and appended to the proof. The original documents (or certified copies) should then be endorsed on their reverse side by the chairman with the insolvent’s name, creditor’s name, proof number (where relevant) and signed and dated by the chairman. Where certified copies have been submitted these should be returned with a note instructing the creditor that the endorsed certified copy must be kept with the original document.
Such a creditor will only be entitled to vote in respect of the net unsecured balance of their debt and they must agree to treat the liability owed by the insolvent as the last call, the remaining solvent parties listed on the bill of exchange being treated antecedently to the insolvent [Note 104] [Note 105].
A creditor with a claim for an unliquidated amount or whose value is not ascertained may not vote, except where the chairman agrees to put upon the debt an estimated minimum value for the purposes of entitlement to vote and admits the proof for that purpose [Note 106] [Note 107]. Where the chairman estimates the value of the claim for voting purposes he/she may do so in relation to all or part of the proof [Note 21] [Note 22]. In any event, the liquidator or trustee must estimate or revise its value for dividend purposes [Note 108] [Note 109].
A claim is not to be considered as unliquidated or unascertainable for voting purposes solely by virtue of the fact it is either disputed or subject to a counterclaim by the debtor [Note 110]. See Chapter 40, Part 7 for further information regarding contingent liabilities.
The gravity of the chairman’s decision will be compounded where the value put on the debt directly impacts upon the outcome of any resolution put to the meeting, although the chairman’s decision should remain independent and not be swayed by this [Note 110]. The chairman should be equally wary of undervaluing or overvaluing a claim for voting purposes and should exercise care in evaluating evidence put forward by the creditor or others in support or dispute of the claim [Note 111].
The chairman may be presented with various types of creditor having unliquidated or contingent claims, including the following:
Where the chairman requires further documentation in order to make such a decision (see paragraph 16.67) he/she should consider suspending or adjourning the meeting (see paragraphs 16.51 to 16.53), however, this should usually only be undertaken when such a decision on the proof is likely to be material to the outcome of the meeting.
Where a landlord submits a claim for sums due in respect of future rent or dilapidations with regard to leasehold premises, the chairman should request sight of the lease agreement in order to review the terms therein. For further details of the actions taken by the official receiver with regard to leasehold premises, please refer to Chapter 31, Part 2, paragraph 31.3.28 onwards.
In the case of Park Air Services plc  BCC 135, it was found that:
Whilst a lease survives, the landlord is not entitled to prove for any instalment of rent until the date upon which it becomes due. Where the landlord has not forfeited, surrendered or otherwise terminated the lease only arrears of rent may be claimed.
Where the lease had been determined, the right to receive rent is also determined, for example where a disclaimer is issued the right to receive rent is lost also and only a right to compensation under section 178 of the Insolvency Act 1986, as it applies to disclaimers survives.
Calculation of the compensation for the disclaimer involves a comparison between the rents and other payments the landlord would have received in future but for the disclaimer and those he/she will benefit from through immediate reversion of the property and re-letting, less any discount applicable for accelerated receipt.
A landlord, claiming for damages for the loss of future rent in relation to a leasehold property where the lease has been forfeited as a result of breach of the agreement by the insolvent, has a duty to mitigate his/her losses, under common law, by for example trying to re-let the premises. In this regard when valuing claims for damages the chairman should consider the state of the property market at that time and the likelihood of the landlord being able to re-let the premises and hence recover his/her losses. In addition, the chairman may consider the factors detailed above at paragraph 16.94 in relation to calculating the compensation applicable following a disclaimer.
Where a landlord voluntarily surrenders the lease or peaceably takes possession of the property he/she will not be entitled to claim for damages under the common law for future rents [Note 112].
A landlord claiming for arrears of rent who has not terminated the lease is not required to mitigate his/her losses [Note 113]. In the cases of Doorbar v Alltime Securities Ltd  2 All ER 948 and Re Sweatfield Ltd  BCC 744 where both leases were ongoing, the chairman’s assessment of one year’s rent to cover all future rent liabilities was accepted by the court for voting purposes in voluntary arrangements, the assessment of sums due taking in to account what the likely outcome of the proceedings would be, i.e. re-entry by the landlord, forfeiture of the lease and re-letting of the property.
The terms within the lease should be checked with regard to any claim for dilapidation of the premises to ensure it is allowed for in the manner claimed.
In the case of Chittenden v Pepper [Note 114] the court found that the dilapidations claimed by the landlord could not be admitted for the value claimed as the claim did not quantify individual items and there was no way to measure the actual costs of repairs that would be incurred by the landlord or the amount by which the landlord suffered by the want of repair to the premises.
In considering claims for dilapidations, the chairman should establish the date upon which the lease was terminated. Where the lease terminated and the dilapidations fell due before the commencement of the insolvency proceedings, it may be possible to admit a proof for dilapidations for voting purposes, after consideration of the schedule of dilapidations prepared by the landlord’s surveyor and any further evidence made available by the landlord or others.
In the case of Lombard North Central v Brook  BPIR 701 the claim entered by Lombard North Central (“Lombard”) in respect of lease purchase agreements, included arrears and a specified sum for damages payable on termination of the agreements. The chairman of the meeting, called to consider the proposal that Durham Counters Ltd enter a company voluntary arrangement, only admitted the proof for voting purposes at a value of £1, on the basis that he was not satisfied that notices of termination were given by Lombard in relation to the lease purchase agreements and that the only amount that Lombard could prove for would be outstanding arrears under the agreements.
Lombard countered that the terms of the lease purchase agreements contained a clause to automatically terminate the agreements in the event that the company called a meeting of creditors; and further stipulated that upon termination all arrears would fall due, in addition to damages for breach of the agreements, consisting of all of the basic rentals which would, but for termination, have become due, less a rebate for early settlement on the finance charges. The court agreed with Lombard. The value of the assets subject to the lease purchase agreements were not offset against the amounts due under the agreements by the court, due to the fact that the property subject to the agreements, at no point, became the property of the debtor.
The chairman should consider the outcome of this case in creditors’ meetings, when dealing with claims involving any such agreements or other contracts containing an automatic termination clause. The presentation of the petition may lead to the automatic termination of the contract and valid claims for any arrears or damages due within the terms of the contract. In such cases the amount submitted for voting purposes (where assets have not been realised by the creditor) may be the amount falling due, less any standard rebate of the finance charge for early settlement.
An insolvent may have a merchant account, which is a contract held with an authorising bank to facilitate acceptance of customers credit cards for payment of goods or services. It is not a bank account accessible by the insolvent directly, rather proceeds of sales after fees and charges are paid in to the business bank account. The merchant account may be a retail account (in person), or a mail order – telephone order (MOTO) account (also including internet accounts). Merchant retail accounts are generally considered to be lower risk than MOTO accounts due to the presence of the card and the purchaser.
Where an insolvent has a merchant account, this may result in a liability to the authorising bank arising after the insolvency order in respect of customers claiming refunds for defects or faulty goods, under their credit card protection guarantee. An authorising bank may seek to submit a contingent claim in respect of its potential liability to customers who wish to claim refunds and given that the potential liability arose prior to the insolvency proceedings, it should be allowed to do so. When attributing a value to such claims authorising banks have in the past attempted to claim a sum based on the estimated trading turnover of the merchant accounts in the last quarter, this is intended to represent the liability, which could arise, if all of the customers who had paid using credit cards were to claim a refund.
The chairman may consider such a claim to be excessive or unduly pessimistic in the circumstances of a particular insolvency. It may be useful to the chairman, in attributing a value to the claim for voting purposes, to seek clarification from the authorising bank of the percentage of claims received for refunds throughout previous quarters, in order to assess what he/she considers to be a more reasonable claim.
A claim by a creditor holding a guarantee in respect of a potential liability in respect of the insolvent is not entitled to simply claim for the maximum amount in respect of that guarantee but should value his/her claim in accordance with the actual sums likely to become due under the guarantee [Note 111].
Any person attending a meeting in insolvency proceedings is entitled to inspect the proxies and associated documents (which includes proofs) either immediately before, or in the course of the meeting at which they are used [Note 117].
Any creditor who has submitted a proof of debt (which has not been wholly rejected), any contributory of the company or the bankrupt (or any person acting on the behalf of such) may inspect the proofs lodged with either the liquidator or trustee at all reasonable times on any business day [Note 115] [Note 116].
The inspection of these documents is subject to Rule 12A.51 in that the official receiver may decline to allow the inspection of a document if he/she thinks that the document should be treated as confidential, is of such a nature that its disclosure would be prejudicial to the conduct of the proceedings, or that the contents of the document might reasonably be expected to lead to violence against any person. Decisions of this nature made by an official receiver may be challenged upon an application to the court by the person(s) wishing to inspect the document(s) [Note 118].
When the trustee or liquidator is appointed the official receiver is required to send him/her all of the proofs received so far, with an itemised list of them. Any further proofs received by the official receiver after appointment should also be forwarded to the trustee or liquidator [Note 119] [Note 120]. Where a successor trustee or liquidator is appointed the previous office holder must as soon as reasonably practicable forward the proofs to the new office holder [Note 121] [Note 122].
Where it is expected that the official receiver will need to act as trustee ex officio or liquidator upon vacation of office of the former trustee or liquidator [Note 125] [Note 126], any proofs held by the office holder should be provided to the official receiver [Note 127] [Note 128].