Thursday, September 27, 2012

The debts of Chee Soon Juan that were not provable in his bankruptcy

It is good to hear that Dr Chee Soon Juan has managed to raise the $30,000 that he had offered by way of settlement to his creditors (which offer had been acknowledged by the OA as has having been accepted by LKY and GCT). 

Perhaps, it is prudent at this stage to be somewhat cautious.  As far the law is concerned, when a person is discharged from bankruptcy, all the debts that are provable in bankruptcy get wiped out.  Creditors will not be able to go after the bankrupt person after his discharge.  However, this does not apply to debts that were not provable in the bankruptcy in the first place.  When a person is made bankrupt, apart from the creditors that made him bankrupt, other creditors will come forward to file their proof of debts.  The OA will not accept all of these claims as debts provable (claimable) in the bankruptcy.  Such creditors may be genuine creditors with genuine cases.  But, they will have to wait.  They can, however, make a claim against the discharged person soon after the bankruptcy is lifted. 

In the email addressed to CSJ, the OA indicates the existence of a claim by DBS bank that the OA had rejected as a debt not provable in bankruptcy.  Such a debt can still be the basis of a fresh claim against CSJ once he is discharged.  I hope that this is a small amount and CSJ has no difficulty in paying off.  If the sum is substantial, we might be dealing with another attempt at applying for bankruptcy by DBS bank this time.  CSJ may not be out of the woods yest. 

OA's email:

7 September 2012

Dear Dr Chee

We refer to your email of 5 September 2012.

2. Please be informed that the Official Assignee ("OA”) conveyedyour offer of composition of $30,000, on 17 August 2012 (the same daywe replied to your email of 8 August 2012) to all your creditors,namely, Mr Lee Kuan Yew, Mr Goh Chok Tong and the Attorney-General’s Chambers. We invited them to respond with their views on your offerand their counter-proposals (if any) by 7 September 2012.

3. You may wish to note that the OA has rejected DBS Bank Ltd’s claimfiled against your estate in bankruptcy, as the debt claimed wasincurred after the making of the Bankruptcy Order against you and istherefore not provable in your current bankruptcy.

4. Your three creditors have since replied on 30 August 2012 and 3 September 2012, informing us that they have no objection to youroffer of composition of $30,000. Please let us know when you will beremitting the sum of $30,000 to our office. Upon receipt of the sum,we will need to ask your creditors to formally vote on the offer. Once they have voted their acceptance of your offer, the OA willprocess the necessary paperwork to effect the annulment of yourbankruptcy.

5. Please note that a certificate of annulment issued under section 95A(1) of the Bankruptcy Act will be binding on your creditorsinsofar as it relates to any debts due to them which are provable inthis bankruptcy.

Yours faithfully
Lydia Loh


Anonymous said...

You mean "not able" with regard to provable debt, right

Subra said...

'provable debts' would be those debts that creditors were able to file with the OA. 'debts not provable' would be those debts that the creditors were not able to claim through the OA. They could still be valid claims

Anonymous said...

Noted and you have corrected your typo

Subra said...

Thanks for getting me to notice it :-)

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