The effect of disclaimer by a liquidator or trustee in bankruptcy on property and third parties
Produced in partnership with Robert Hantusch of Three Stone
The effect of disclaimer by a liquidator or trustee in bankruptcy on property and third parties

The following Restructuring & Insolvency guidance note Produced in partnership with Robert Hantusch of Three Stone provides comprehensive and up to date legal information covering:

  • The effect of disclaimer by a liquidator or trustee in bankruptcy on property and third parties
  • Proving for loss and damage
  • Vesting orders

Disclaimer under the Insolvency Act 1986 (IA 1986) by either a liquidator or a trustee in bankruptcy (trustee) has the following effects:

  1. it operates to determine from the date of the disclaimer the rights interests and liabilities of the company or the bankrupt/bankrupt’s estate in respect of the property disclaimed

  2. in the case of disclaimer in bankruptcy, it discharges the trustee from any personal liability in respect of the property in question with effect from the commencement of the trustee’s appointment

  3. it does not—except so far as is necessary for the purposes of releasing the company or the bankrupt/bankrupt’s estate—affect the rights or liabilities of any other person

  4. it entitles any person suffering loss or damage because of the disclaimer to prove for that loss or damage in the winding-up or bankruptcy

  5. an application for a vesting order can be made by any person who:

    1. claims an interest in the disclaimed property

    2. is under a liability in respect of the disclaimed property that is not discharged by the disclaimer, or

    3. in the case of disclaimer of a dwelling house by a trustee, any person in occupation of or entitled to occupy the dwelling house when the bankruptcy petition was presented

For further reading on the steps that a liquidator or trustee must take to effect a disclaimer, see Practice Note: The process