For the purpose of this chapter and the guidance given therein the term aircraft can be taken to cover aeroplanes, helicopters, hot-air balloons, airships and gliders.
With very limited exceptions, all civil aircraft using the skies of the United Kingdom are required to carry a unique mark [note 1]. Exceptions include historic aircraft with historic or military markings - which are authorised by the Ministry of Defence. Usually, the unique mark is a group of five letters of which the first identifies the country in which the aircraft is registered (for example, G for the United Kingdom) and the other four letters are allocated by the Civil Aviation Authority (CAA) on registration of the aircraft. A particular registration mark can be reserved in advance of its application to an aircraft but there is no market in transferring these marks (in the same way as “personalised” car registration numbers are bought and sold) as a mark can only ever be applied to one airframe.
The Civil Aviation Authority (CAA) maintains a register of aircraft registered in the United Kingdom [note 2]. The register is accessible on-line (http://www.caa.co.uk/application.htmx?catid=60&pagetype=65&appid=1) and lists the registration mark, aircraft type, serial number and owner. In addition, it gives details of the previous identity (if any) of the aircraft, whether it is currently registered or not, the date of registration, manufacturer, class of aircraft, number of engines, maximum take-off weight, total hours flown, year built and date of issue of certificate of airworthiness. The UK register of Civil Aircraft is not a register of legal ownership and the details on the register do not confirm legal title and the official receiver will need to confirm ownership by reference to other documentation.
A registration mark may only be used once and cannot be applied to another aircraft even in circumstances where the original aircraft is destroyed or exported. This being the case there is no market for unusual or “personalised” registration marks.
An aircraft registered in the UK register (see paragraph 31.10.2 above) may be made security of a loan or other valuable consideration [note 3]. The Civil Aviation Authority maintains a register of aircraft mortgages into which a mortgagee may apply to have a mortgage registered [note 4]. The mortgage may relate to a stock of spare parts kept for the aircraft but does not otherwise include a mortgage created as a floating charge [note 5]. A registered charge does not construe priority over a possessory lien in respect of work done on the aircraft (whether before or after the registration of the mortgage) on the express or implied authority of any persons lawfully entitled to possession of the aircraft or over any right to detain the aircraft under any Act of Parliament [note 6]. The register is available for public search on application to the following [note 7]:
Aircraft Registration Section
Tel: 020 7453 6666
Fax: 020 7453 6670
The current prescribed form is CA350 (http://www.caa.co.uk/application.htmx?catid=33&pagetype=65&appid=11&mode=detail&id=1276) and the fee payable is currently £25. If a certified copy is required this can also be provided for a further fee of £25.
Fees are charged by airport operating companies to individual aircraft relating to the aircraft’s use of the airport. Charges vary depending on factors such as the type of aircraft and the time of the departure or arrival. An airport operator may detain an aircraft that is in default relating to airport charges whether or not the charges were incurred by the person who is the operator of the aircraft at the time of detention [note 8]. The power to detain extends to equipment and stores carried by the aircraft and allows the aircraft to be detained at any other airport owned by the same operating company. The aircraft operator is allowed 56 days to pay the outstanding charges, or provide sufficient security, after which the airport operator may apply for leave of Court to sell the aircraft [note 9].
In the event that the official receiver becomes aware that an aircraft owned by an insolvent has been, or is likely to be, detained due to unpaid charges consideration should be given to paying the outstanding charges if they are less than the value of the aircraft. The official receiver will need to obtain a specialist valuation of the aircraft and a search of the internet should assist in locating details of an agent that specialises in the valuation and sale of aircraft.
If, after the prescribed 56 days, the charges for which an aircraft has been detained remain outstanding, the detainor may apply to court for an order to sell the aircraft [note 10]. In advance of making the application to court the detainor must serve notice on interested parties and give them the opportunity to be joined in the proceedings [note 11]. On becoming aware that an aircraft belonging to an insolvent has been, or is likely to be, detained, the official receiver should immediately inform the detainor of his/her interest in the aircraft. The order of payment from any subsequent sale of the aircraft is set out in the legislation [note 12] and the official receiver should monitor the sale and distribution to ensure that any payment due is received.
In the UK the CAA levies charges against aircraft operators for the provision of air navigation (air traffic control) services [note 13]. Regulations relating to the procedures for the detention of aircraft [notes 14 and 15] whose operators have outstanding payments in this respect are largely the same as those relating to outstanding airport charges, and the guidance outlined in paragraph 31.10.6 should be followed. The CAA has the power to detain aircraft in respect of outstanding air navigation charges [note 16] and, therefore, notice of the official receiver’s interest in a detained aircraft should be sent to the CAA, at the following address:
The Secretary and Legal Advisor
It is unlikely that the official receiver will become involved in the realisation of assets that are subject to a charge. Where assets are charged the official receiver should make early contact with the charge-holder to establish their intentions with regards to the charged asset. If the charge-holder is unwilling to appoint a receiver under the terms of its charge, or otherwise deal with the asset, then the official receiver should take steps to protect the asset(s) and deal with them in the usual way. It may be appropriate to seek the appointment of a liquidator or trustee other than the official receiver via a Secretary of State appointment [notes 19 and 20]. (see chapter 17 – Appointment of Liquidators and Trustees)
The official receiver can verify the existence of charges and mortgages by reference to the following sources:
Aircraft – Civil Aviation Authority (paragraph 31.10.5)
Farm equipment and stock – Agricultural Credits Department (paragraph 31.10.12)
Patents – UK Patent Office (paragraphs 31.10.103 and 31.10.107)
Plant Breeders’ Right – Plant Variety Rights Office (paragraph 31.10.110)
Registered Designs – UK Patent Office (paragraph 31.10.75)
Ships and boats – Registry of Shipping and Seamen (paragraph 31.10.34)
Trade marks – UK Patent Office (paragraphs 31.10.116 and 31.10.120)
Farm Equipment and Stock
Essentially, equipment and stock that are assets of a farm are no different to those of any other business and should be dealt with in the usual way. Livestock has special requirements and should be dealt with as per the guidance given in paragraph 31.6.40.
Under the Agricultural Credits Act 1928 a charge may be created in favour of a bank over farming stock and other agricultural assets owned by a farmer [note 21]. This is completely separate to the farm itself (i.e., property/land) which may be subject to the usual property charge. (see paragraphs 9.101 to 9.107) This Act defines a farmer as any person (not being an incorporated company) who owns or is tenant of an agricultural holding and cultivates the holding for profit [note 22]. The term farmer can be extended to the plural to include partnerships [note 23] but companies are specifically excluded from entering into this arrangement.
The charge is registered against the name of the farmer personally and not against any property he/she may own. It may be a fixed or floating charge or both, but a floating charge would crystallise on the making of a bankruptcy order [note 24]. The intention of the Act is that farmers are free to deal with assets subject to an agricultural charge as they would in the normal course of business. Subject to the terms of the charge, a farmer is usually free to deal with assets subject to a charge (including sale thereof) as long as the proceeds are paid to the bank holding the charge.
A charge created under the Agricultural Credits Act 1928 must be registered at HM Land Registry Agricultural Credits Department within seven clear days of the creation of the instrument to which the charge relates [note 25]. HM Land Registry maintains a register of charges [note 26] and this is available for public inspection [note 27] on submission of the relevant form [note 28] http://www.landregistry.gov.uk/assets/library/documents/ac6.pdf with a fee (currently 50p per name searched). Completed forms may be returned by post only:
Agricultural Credits Department
HM Land Regisrty
Enquiries relating to the form, or the system of agricultural charges generally, may be directed to the above address, or by telephone to 01752 636676.
A failure to register the charge does not automatically remove the benefit of the charge to the lender but it will not establish priority over any subsequent charges.
Where an agricultural charge creating a floating charge has been made, an agricultural charge creating a fixed charge on the same property is void whilst the floating charge remains in force [note 29].
In circumstances where an agricultural charge is created to secure a current account or other advances, and further sums are advanced against this charge they will take priority over a later charge so long as it was not registered at the time the original charge was created, or when the last search of the register was carried out by the bank [note 30].
If a farmer has mortgaged their land, and growing crops are included in the agricultural charge, the rights of the bank under the charge in respect of those crops shall take priority over the rights of the mortgagee [note 31] and the agricultural charge also has priority over a right to distrain for taxes, rent or rates [note 32].
Where a farmer has been made the subject of a bankruptcy order and has had an agricultural charge created over any farming stock or other agricultural assets belonging to him/her and the charge is created within three months of the presentation of a bankruptcy petition and operated to secure any sum owing to the bank immediately prior to the giving of the charge, the bank concerned can only claim under their charge for the increase in their debt in the period from the creation of the charge to the making of the bankruptcy order (with the remainder being an unsecured debt in the proceedings) unless the bank can prove that the farmer was solvent at the date of the creation of the charge [note 33].
A farmer may be entitled to compensation for early termination of a farming tenancy by landlord or in relation to the cost borne by the farmer of agreed improvements to the farm during the period of the tenancy. The amount and nature of compensation payable is dependent on the legislation under which the tenancy was granted and [note 34] may be offset against outstanding rent. The compensation may form an asset in the insolvent estate and the official receiver should take steps realise the compensation in the normal way.
Generally, a fixture is considered to be an item which has become so attached to the land or property to form, in law, part of the land or property. For the purpose of dealing with an insolvent estate it may be necessary for the official receiver to identify which of the insolvent’s chattels or trade equipment constitute fixtures and which do not.
Items which constitute fixtures may be considered not to be assets of the insolvent estate in so far as they may belong to the charge holder or landlord of the property to which they are so affixed. Whether an item is a fixture depends on the purpose of its attachment (or, annexation) to the property, and whether it could be removed without doing irreparable damage to the property [note 35]. In respect of a leased property, the terms of the lease may give details regarding what is to be considered a fixture, and what is not.
Where there is a mortgage the general principle is that, subject to any contrary intention, a mortgage of land comprises – without any express provision referring to them – all fixtures which at the date of the execution of the mortgage were attached to the land and any that are subsequently annexed to the land [note 36].
Generally, items intended to be permanently fixed to the fabric of the building (such as a bathroom suite) are the property of the lessor, or the mortgagee if they are in possession. However, important exceptions to this rule have arisen and fixtures which can be removed under these exceptions are known as “tenant’s fixtures”. In premises occupied for business purposes, trade fixtures attached by the tenant for the purpose of his/her trade or business are removable at any time during the term and include machinery, utensils and buildings of a temporary nature erected by the tenant for the purpose of carrying on a business, and may be classed as trade fixtures [note 37]. As a consequence of this, the official receiver may still be able to deal with fixtures which may otherwise belong to the lessor or mortgage.
Each case is likely to turn on its own merits and it is not possible to give blanket guidance, as each circumstance is likely to be different. In cases where there is a dispute of a material nature regarding the definition of fixtures the advice of Technical Section should be sought.
See also Chapter 34 -, paragraphs 34.58 to 34.60.
Where the insolvent has hired property to others, details of the whereabouts of all the property, its value and the conditions of the hire should be obtained. Where the goods are of sufficient value to merit sale, they should be dealt with in the usual way, instructing agents if appropriate. If it is necessary to obtain insurance, the nature and whereabouts of the goods should be notified to the insurers and it should be made clear that they are not within the official receiver’s control (see Chapter 49 – for further guidance regarding insurance). This may affect the insurance premium payable and the likelihood of obtaining cover.
It may be possible to effect a sale of the goods to the hirer, though in this case the official receiver or his/her agents should attempt to recover any outstanding hire charges as part of the sale agreement if possible. Alternatively, a competitor in the field might be willing to purchase the property and the benefit of the hire contract.
If the equipment cannot be dealt with by way of sale, it should be disclaimed in situ.
See also paragraph 31.6.53 for steps to be taken when goods are on hire to the insolvent.
Such clothing, bedding, furniture or household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his family do not form part of the bankrupt’s estate [note 38].
It is possible that a bankrupt owns furniture or household equipment that is not required for his/her basic needs, such as furniture in a room let to a lodger or in another property owned by the bankrupt but let to a third-party. It is unlikely that the second hand value of such furniture would be sufficient to warrant its removal and sale. It may be possible to offer the items for sale in-situ to a member of the bankrupt’s family or other interested party. If a member of the bankrupt’s family claims any of the furniture, they may claim them by completing the relevant form [note 39].
Valuable furniture, such as antiques, which is being used by the bankrupt could be claimed by the trustee as exempt property of excess value [note 40] (see chapter 8 part 8 – Exempt Property). Only where furniture is of sufficient value to merit sale should insurance be obtained.
In deciding whether it is appropriate to sell furniture or household equipment, the official receiver may consider establishing an approximate market value by referring to internet sites, for example www.ebay.co.uk. But of course this won’t be possible with antique furniture, and a specialist agent may need to be employed.
Clothing, unless it is a designer label, or collectors’ items, such as pop memorabilia or antique items is unlikely to be of sufficient value to be sold. In cases of doubt advice may be obtained from an agent or a specialist second-hand shop. Antique or other collectable clothing should be valued and sold by specialist agents.
In circumstances where a bankrupt is in possession of jewellery it may be appropriate to deal with the jewellery as an asset in the proceedings. This would depend on the value of the item and the likely costs of sale and, in this respect, agents (possibly a local jewellery shop) should be engaged to carry out a valuation.
In a case where the official receiver is taking possession of jewellery from a bankrupt or director, either at an inspection or during interview, a detailed receipt should be issued which should, in so far as is possible, describe the items collected. It is accepted that the collecting officer will be unable to verify the material from which the jewellery is made, or the quality or grade thereof and, therefore, the description should be phrased in general terms, such as:
“Yellow metal ring, said by X to be gold, with three clear stones, said by X to be diamonds.”
The receipt should be signed by the collecting officer and the person from whom the items are collected. Ideally, a copy should be left with the person giving up possession of the item.
Items collected should be passed to the official receiver’s agents for sale as soon as possible. When jewellery is collected outside the operational hours of the official receiver’s agents, it should be stored in the office safe pending collection by the agents. Adequate insurance should be obtained for items of high value.
Specialist agents should be employed to deal with the sale of antique jewellery or jewellery pieces of high value. The official receiver’s agents may be able to suggest a suitable firm or alternatively local jewellers may be able to assist.
The general principle is that an engagement ring constitutes a gift conditional on an event taking place (for example the marriage or civil partnership) and the ring does not pass as property to the recipient until the marriage has taken place [note 41]. If the bankrupt’s fiancé can prove that the funds to purchase the ring came from his own funds (rather than those of the bankrupt) then the ring will not form part of the estate. On the other hand, if he cannot prove this, or the marriage took place before or during the period of bankruptcy then the Official Receiver may claim the ring as an asset or after-acquired property – whichever is appropriate. The ring should, of course, have sufficient value to warrant the costs of sale and official receivers should not take engagement rings as a matter of course.
It follows that a ring given by a bankrupt to his fiancée may also be recoverable as a transaction at undervalue if the wedding has yet to take place as at the date of the making of the bankruptcy order.
It may be possible to effect a sale of the ring to a family member or other third party introduced by the bankrupt.
Weddings rings generally have little intrinsic financial value tending, as they do, to be simple gold bands. Consideration has been given to the symbolism of a wedding ring and, given these circumstances; it is unlikely to be appropriate for the Official Receiver to claim a wedding ring as an asset in the bankruptcy.
In circumstances where the wedding ring is unusual and has an intrinsic financial value (for example, it may be set with precious stones) then the official receiver may consider realising the ring and providing a replacement gold band.
Chapter 31.1 deals with trade debts owed to an insolvent and the guidance in that chapter can be followed for monies owed to an insolvent which arise from loans made which are personal in nature. It is unlikely that there will be a written loan agreement but, if there is, it should be obtained so that the terms of the loan can be established and to support the debt collection agent’s recovery of the monies.
The Official Receiver should consider the appropriateness of the bankrupt or company making the loan during a period they may have been insolvent themselves as this may be misconduct relevant to a BRO or disqualification application.
When a bankruptcy order is made against a member of a partnership one of the effects is to dissolve the partnership [note 42]. The Official Receiver will not be able to deal with the assets of the partnership unless an order has also been made against the partnership, or if the court so directs. The solvent member(s) of the partnership should be informed of the making of the winding-up order and asked to account to the Official Receiver for the bankrupt’s share in the partnership. There is a standard letter for this purpose [note 43].
In the circumstances where there is a valid insolvency order against the partnership, or where directions have been issued by the court, the Official Receiver should deal with the assets in the usual way.
See also Chapter 53 – Partnerships.
The possibility of a bankrupt’s personal correspondence having a monetary value is most likely to occur in public interest cases, but the principles outlined in this section may be relevant to bankruptcies in general.
A bankrupt’s estate is defined as being all property belonging to or vested in the bankrupt at the commencement of the bankruptcy [note 44]. Further, property is defined as including money, goods, things in action and land and property [note 45]. The trustee is under a duty to take possession of all books, papers and other records which belong to the bankrupt or are in his/her possession or under his/her control [note 46] and may at any time sell, destroy or otherwise dispose of books, papers or other records of the bankrupt [note 47].
It may appear, on the face of it, that the aforementioned can be taken to include personal correspondence and gives the trustee the right to sell the correspondence. However, it has been ruled that personal correspondence, whatever the subject matter, does not form part of the bankrupt’s estate within the definitions of the Insolvency Act 1986. It was further ruled that, while some of the correspondence may relate to affairs relevant to the administration of the bankrupt’s estate, that does not bring it within the definition of estate. The judgement equated a bankrupt’s personal correspondence to a right of action for damages for libel as being peculiarly personal to him/her and his/her life as a human being [note 48].
It is also possible that the removal and sale of a bankrupt’s personal correspondence may contravene the Convention for the Protection of Human Rights and Fundamental Freedoms (1953) article 8 which provides a right to respect for one’s “private and family life, his home and his correspondence.” This was considered in the case referred to above, but did not form part of the judgement. This aspect has not, otherwise, been considered in a court.
Ships and boats
For the purpose of this chapter and the guidance given therein the terms ships and boats can be taken to include merchant shipping, pleasure craft, fishing boats, yachts and small craft, and can be taken to include both sea and ocean going vessels and vessels used on inland waterways.
Ships and boats with a connection to Britain (usually through British, European Economic Area (EEA) or European Union (EU) ownership) may be registered with the Registry of Shipping and Seamen [note 49]. Registration is voluntary, but brings with it benefits such as easier passage through foreign ports, assistance with seafarers’ travel costs, threat level information and the protection of the Royal Navy.
Fishing boats (with the exception of salmon cobbles, boats under 10 metres length without an engine or boats under 10 metres length which are used to catch only common eels) [notes 50 & 51] are not allowed to fish for profit unless they are on the UK register or the register of another country. A mortgage may not be registered against a vessel unless the vessel is recorded on the register.
At registration, the ship is given a port of choice, which is the port from which the vessel usually operates. This is chosen by the person applying for registration.
A registered ship may be owned outright by one person, or divided into a maximum of 64 shares. A share may be owned by up to five people or companies. Joint owners of a share are considered to be one person [note 52].
Following registration of the boat or ship it is allocated a registration number (known as the official number) [note 53], which is then carved on the main beam or, if there is no main beam, another readily accessible part of the vessel [note 54]. On commercial ships this is normally found on the aft side of the forward beam of the main hatch and a note of the tonnage will be found in the same place.
A registered ship must also have a name, in roman letters, which is different from any other ship in the same part of the register. In addition, fishing boats must have a different name from any other boat or ship that operates from the same port of choice [note 55].
A registered ship, or a share in a registered ship may be made security for the repayment of a loan [note 56]. The mortgagee may apply to have the mortgage registered with the Registry of Shipping and Seamen [note 57] (see paragraph 31.10.31).
Whilst the register does not constitute proof of ownership of a ship it may assist the official receiver where ownership of a ship is unclear as the details provided might be useful. Applications to search the register may be made to:
Registry of Shipping & Seamen
Tel: 029 2044 8800
Fax: 029 2044 8820
Extracts of the register are known as transcripts and the current prescribed fee for the issue of a transcript is £21 for a current transcript or £32 for a historical transcript. The register contains details of the ship’s name and number, its owners, and of any mortgage against the vessel.
A ship may be detained by a number of different authorities (such as the Royal Navy or the Coast Guard) for a number of different reasons (such as unsafe working practices, being a dangerous vessel or breach of pollution controls). In the event that the Official Receiver becomes aware that a ship belonging to an insolvent has been, or is likely to be, detained an attempt should be made to identify the location of the ship and the identity of the detaining authority. Consideration can then be given to the costs of having the ship released against the likely value to the estate. Due to the varied nature of the law in this regard, official receivers may wish to seek the advice of Technical Section before proceeding.
To sell a ship or share(s) in a ship a bill of sale under the prescribed format should be produced to the registrar [note 58]. The current prescribed form is the MSF 4705 (http://www.ukshipregister.co.uk/msf4705.pdf) and the current fee is £80. In addition to this, any changes to the ship (such as name or tonnage), or the port of operation, must be notified to the registrar in writing.
Lake Windermere in the Lake District in Cumbria has a parallel registration system for boats with engines using the lake. Boats which are already registered with the Registry of Shipping and Seamen need not register separately, but must visibly display the official number allocated by the registrar. Boats that are not registered with the registry are required to register with the Lake District National Park Authority to obtain a registration number that must be visibly displayed on the vessel. Further details can be obtained from:
Windermere Registration Clerk
Tel: 015394 47956
The other lakes in the Lake District do not operate similar schemes. The reason for this is that the Windermere scheme is primarily in place to allow the enforcement of speed limits relating to powered craft and, historically, there has been few powered boats using other lakes.
Any boat which is kept within the Broads Authority’s navigation area for more than 28 days must be registered with the authority. The boat is then issued with an adhesive registration number which must be displayed on each side of the bow and on the stern. Any change in ownership of the boat is to be notified to the authority by both the buyer and seller. The registration number is not changed when the owners change. Further details can be obtained from:
Tel: 01603 610734
The Environment Agency operates a registration scheme for boats using waterways over which it has responsibility. These include most of the navigable rivers of the United Kingdom, along with the Royal Military Canal through Sussex and Kent. They record details of the owner of the boat and changes in ownership are notified to them. The scheme is administered from a number of centres, depending on which waterway is used by the vessel. Further information can be obtained from www.environment-agency.gov.uk/navigation.
British Waterways issue licences for boats to use the United Kingdom’s canal system. They record, amongst other things, details of the owner of a boat and are notified of changes in ownership. Further information can be obtained from:
Customer Service Centre
Tel: 01923 201120
Fax: 01923 201304
A contributory, or shareholder, of a company is liable to contribute to the assets of a company in the event of its winding-up [note 59]. Usually, this liability is limited to the cost of the shares purchased [note 60]. In most cases encountered by Official Receivers the contributories will have paid their liability in respect of their shareholding at the time of purchase or, if not, the liability will be of a nominal value only and further action will not be necessary.
Where there is a substantial sum outstanding, the Official Receiver, as liquidator, should take steps to recover the sums owed. In the first instance, the contributories’ ability and/or willingness to pay should be established. The directors or accountants of the company may be able to assist in this. However, as with any other debt recovery action, the true position may only be discovered when the contributories themselves are approached for payment.
Application should be made by letter to the contributories for the unpaid amounts. The letter should detail the amount unpaid on their shares and request payment or proposals for payment within a specified period. The contributory should also be made aware that failure to pay might result in the Official Receiver taking court action (see paragraph 31.10.42 regarding settling a list of contributories)
The court has the power to settle a list of contributories [note 61]. Effectively, this means that a list of the contributories is drawn up in order that unpaid calls can be pursued. This power is delegated to the liquidator in the rules [note 62] and it is the duty of the liquidator, as an officer of the court, to settle a list and, with the court’s approval, rectify the register of members as necessary (where there have been changes to the list kept in the company’s statutory books) [note 63].
The list produced should identify the following [note 64]:
Once the list has been drawn up, notice should be sent by the official receiver as liquidator to every person included in the list of creditors informing them that he/she has settled a list of contributories and giving them a chance to object to any entry in, or omission from, the list. The notice should contain details of the following [note 65]:
The notice should also inform the contributories that if they object to any entry in, or omission from, the list they should inform the liquidator in writing within 21 days of the notice [note 66].
On receipt of any objection to an entry in, or omission from, the list of contributories the liquidator must consider the details of the objection and, within 14 days, give notice to the objector that he/she has either amended the list (specifying the amendment) or that he/she considers the objection to be not well founded and declines to amend the list [note 67]. The official receiver as liquidator has the power to amend or add to the list [note 68]
The objector may, within 21 days of the notice of the liquidator’s response to the original objection, apply to court for an order removing the entry to which he objects or otherwise amending the list [note 69]. The Official Receiver is not personally liable for the costs relating to such an application [note 70].
Once any objections have been disposed of and the list of contributories has been settled the official receiver as liquidator may (subject to sanction or leave of court outlined below) make calls on any or all of the contributories to the extent of their liability [notes 71 and 72].
The official receiver as liquidator requires the sanction of the liquidation committee [note 73] or leave of court [note 74] before making calls. In the absence of a liquidation committee the official receiver will require the consent of the Secretary of State [note 75] and should contact Technical Section to obtain sanction.
Once sanction has been obtained the official receiver may serve notice on the contributories requiring payment to be made. The notice should be given to each of the contributories and should contain detail of the amount of balance due from him/her and whether the call is being made with sanction or leave of court [note 76].
The payment of any amount due may be enforced by order of court [note 77].
The procedure for unregistered companies is very similar to that outlined above. It is covered in detail in Chapter 58 Unregistered companies (paragraphs 58.16 to 58.20)
Generally, where an asset is considered to be unsaleable it should be disclaimed as soon as possible. An alternative is to sell the item to the directors of a company in liquidation or a relative of the bankrupt for a nominal sum.
Where goods remain unsold after an auction, the official receiver should take his agent’s advice as to whether it would be worthwhile to enter the items into another sale or otherwise arrange for their disposal.
In bankruptcy cases the official receiver as trustee may, with the sanction of the creditors’ committee, divide the asset between the creditors in circumstances where it cannot otherwise be sold [note 79]. It is unlikely that this course of action will be the most appropriate to follow and, as sanction is required, the advice of Technical Section should be sought before embarking on such a course.