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Dividends in Bankruptcy

dividend, trustee, proved, separate and declared

DIVIDENDS (IN BANKRUPTCY). With regard to the distribution of dividends amongst the creditors of a bankrupt's estate, the Bankruptcy Act, 1883, provides : " Section 58. (1) Subject to the retention of such sums as may be necessary for the costs of administration, or other wise, the trustee shall, with all con venient speed, declare and distribute dividends amongst the creditors who have proved their debts.

• (2) The first dividend, if any, shall be declared and distributed within four months after the conclusion of the first meeting of creditors, unless the trustee satisfies the committee of inspection that there is sufficient reason for postponing the declara tion to a later date.

(3) Subsequent dividends shall, in the absence of sufficient reason to the contrary, be declared and distributed at intervals of not more than six months.

" (4) Before declaring a dividend the trustee shall cause notice of his intention to do so to be gazetted in the prescribed manner, and shall also send reasonable notice thereof to each creditor mentioned in the bankrupt's statement who has not proved his debt.

• (5) When the trustee has declared a dividend he shall send to each creditor who has proved a notice showing the amount of the dividend and when and how it is payable, and a statement in the prescribed form as to the particulars of the estate.

Joint and Separate Dividends.

59. (1) Where one partner of a firm is adjudged bankrupt, a creditor to whom the bankrupt is indebted jointly with the other partners of the firm, or any of them, shall not receive any dividend out of the separate property of the bankrupt until all the separate creditors have received the full amount of their respective debts.

(2) Where joint and separate properties are being administered, dividends of the joint and separate properties shall, subject to any order to the contrary that may be made by the Court on the application of any person interested, be declared to gether ; and the expenses of and incident to such dividends shall be fairly apportioned by the trustee between the joint and separate properties, regard being had to the work done for and the benefit received by each property.

Right of Creditor who has not Proved Debt before Declaration of a Dividend.

" 61. Any creditor who has not proved his debt before the declaration of any divi dend or dividends shall be entitled to be paid out of any money for the time being in the hands of the trustee any dividend or divi dends he may have failed to receive before that money is applied to the payment of any future dividend or dividends, but he shall not be entitled to disturb the distribution of any dividend declared before his debt was proved by reason that he has not participated therein." Before declaring a final dividend, the trustee shall give notice to creditors whose claims have not been established to his satis faction, that, if not established within a time limited by the notice, he will make the final dividend without regard to their claims (Section 62). (See BANKRUPTCY.)