Sequestration Archives - Ashersons Attorneys

01 Feb 2019

Proving Your Claim in a Liquidation or Sequestration – When You Should, and When You Shouldn’t

Having to write off bad debt is one thing – having to pay in even more money for the privilege is just adding insult to injury. Yet that is exactly the danger you face if one of your debtors is sequestrated or liquidated (we start off by explaining the different terminology) and you prove your claim without considering the “danger of contribution”. What is that? How does it arise? What if you are a petitioning creditor or hold security for your claim? How can you protect yourself from having to contribute? Read on for the answers… The background You are owed…

Your Body Corporate and Arrear Levies: To Sequestrate or Not To Sequestrate?

Levies are the lifeblood of a sectional title scheme, and the Body Corporate has a duty to recover arrears from defaulting owners. It has the power, in addition to following standard debt collection procedures and perhaps approaching the Community Schemes Ombud for assistance, to apply for the sequestration of the owner’s estate. Indeed just the threat of a sequestration application is sometimes enough to frighten a recalcitrant debtor into paying up. But, as Shakespeare might have put it, there’s an alarming “rub” here that body corporate trustees ignore at their peril. It arises from ‘the danger of contribution’ in insolvent…

Suing an Insolvent Debtor – Can You Recover from his Trust?

Your debtor owes you a fortune, but when his estate is sequestrated there is nothing in his own name. However you find out that he is trustee of a wealthy family trust with lots of assets that you think are really his – can you recover from his trust? The answer is yes, you can, but only in certain circumstances, and only by choosing the right line of attack. A recent Supreme Court of Appeal (SCA) case illustrates. A Ponzi scheme, a suicide, and R11m worth of missing cattle A former farmer and cattle dealer committed suicide, leaving debts of…