This article is pursuant to many that I have written before on insolvency practice ie, liquidations and corporate rescue proceedings. In this article, I address a creditor’s claim form filed by a creditor against a company in liquidation.
Proof of claims
This is regulated by section 66 of the Insolvency Act (Chapter 6:07) (“the Insolvency Act”).
According to section 66(6), any person who has a liquidated claim against an insolvent estate, the cause of which arose on or before the date of liquidation, or the authorised agent of that person, may at any time before the distribution of the estate, prove that claim against the estate.
According to section 66(6), every claim must be proved by an affidavit in a form corresponding substantially with Form B or C of the First Schedule and subject to section 66(10) and 66(11) of the Act. Hereunder, I explain the standard claim form B. A copy of the form is available from the Office of the Master of the High Court.
A creditor may also obtain it from the liquidator.
Contents of the standard creditors’ claim form
According to Form B, this form is by way of an Affidavit for proof of any claim other than a claim based on a promissory note or other bill of exchange.
The contents of the standard claim normally include the following:
Name of the insolvent estate.
Date of liquidation.
Name of creditor.
Address, email, telephone numbers of the creditor.
Amount of the claim at the date of liquidation.
Declaration by the creditor or person representing the creditor.
Declaration by the creditor or the creditor’s authorised agent
The declaration will include the following:
That the deponent is the creditor or authorised representative of the creditor, his/her capacity and documentation proving authority.
That he/she has personal knowledge of the nature and particulars of the claim and has satisfied himself/herself as to the nature and particulars of the claim.
Whether the debt was obtained by cession or not.
The nature of the claim (for example, money advanced, goods delivered, salary due), the amount and the supporting documents.
When the debt arose whether the debt was due on the date of the liquidation and whether the debt or part thereof will become due after liquidation, plus supporting documents.
Whether the creditor holds security or not and particulars and value of any such security.
Whether it is the insolvent estate only or another person is liable for the debt.
Authorisation to the liquidator to have any dividend due to the creditor transferred electronically to a bank account stated by the creditor.
Signing of the affidavit
The creditor will sign the affidavit, which shall be commissioned by a commissioner of oaths.
The commissioner of oaths shall state his / her full name, business address, designation and area or office.
Notes for guidance of creditors regarding the proof of claims
The form designed by the Master has important guidance on how to complete it. This move by the Master is appreciated.
Power of Attorney
Where a person acts in a representative capacity for the creditor, that person requires the Power of Attorney granted to him/her by the creditor. Fortunately, for convenience, the Office of the Master has designed the Power of Attorney, which includes the following details:
Name of the company in liquidation, Master’s file reference number, name of creditor, address and the person granting the Power of Attorney.
Nomination, constitution and appointment by the creditor of the agent and the powers given to the agent.
Conclusion
A creditor’s claim form is a key requirement in liquidations. It has to be completed diligently and submitted in terms of the law.
Disclaimer
This simplified article is for general information purposes only and does not constitute the writer’s professional advice.
Godknows (GK) Hofisi, LLB(UNISA), B.Acc (UZ), Hons BCompt (UNISA), CA(Z), ACCA (Business Valuations) MBA(EBS, Heriot- Watt, UK) is the Managing Partner of Hofisi &/Partners Commercial Attorneys, chartered accountant, insolvency practitioner, commercial arbitrator, registered tax accountant and advises on deals and transactions. He writes in his personal capacity. He can be contacted on +263 772 246 900 or ghofisi@ hofisilaw.com-herald
