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Insolvency Law
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Draft – January 2003 |
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Table
of Contents |
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CHAPTER 1 GENERAL PROVISIONS
Article 1. Scope and Purpose CHAPTER 2 OPENING OF INSOLVENCY PROCEEDINGS -- SUBJECTS, GROUNDS AND PETITION
Article 4.
Subjects of Insolvency Proceedings
CHAPTER 3 DECISION ON THE PETITION TO OPEN INSOLVENCY PROCEEDINGS
Article 10. Hearing of the Petition CHAPTER 4 EFFECTS OF THE OPENING OF INSOLVENCY PROCEEDINGS Part A – General Effects
Article 17. Stay of all other Proceedings Part B – Safeguarding and Enhancement of the Estate
Article 28. Treatment of Contracts Part C – Claims
Article 33. Admissible Claims CHAPTER 5 PLANS OF COMPROMISE Part A – General Matters
Article 38. Proposal for a Plan Part B – Approval of a Plan of Compromise
Article 42. Meeting to Consider and Approve the Plan CHAPTER 6 THE OPENING CREDITORS’ MEETING
Article 49. Convening of the Opening Creditors’ Meeting CHAPTER 7 LIQUIDATION AND SATISFACTION OF CLAIMS
Article 54. Sale of Assets CHAPTER 8 TERMINATION OF INSOLVENCY PROCEEDINGS FOLLOWING LIQUIDATION
Article 57. Administrator’s Report following Liquidation CHAPTER 9 RESUMPTION OF INSOLVENCY PROCEEDINGS WHICH WERE TERMINATED AFTER LIQUIDATION
Article
63. Application for Resumption CHAPTER 10 PROVISIONS DEALING WITH THE ADMINISTRATOR AND CREDITORS Part A - The Administrator
Article 66. Qualifications Part B – Creditors
Article
71. Convening of Creditors’ Meetings CHAPTER 11 MISCELLANEOUS PROVISIONS Article 78. Service of Documents Under this Law CHAPTER 12 Penalties Article 79. Penalties CHAPTER 13 Transitional Provisions Article 80. Court of Jurisdiction CHAPTER 14 Final Provisions Article 81.
CHAPTER 1 GENERAL PROVISIONS
Article 1. Scope and Purpose (a) This Law establishes the conditions and procedures governing the insolvency of debtors. (b) Insolvency proceedings shall provide collective, orderly and fair satisfaction of creditors’ claims out of a debtor’s estate and, where the parties in interest agree it is appropriate, the rehabilitation of the business of the debtor. Article 2. Definition of Terms (a) “Claim” means any right to receive payment from the debtor or from assets of the debtor which arose before the opening of insolvency proceedings, regardless of whether such claim is conditional, unliquidated or contingent, unless expressly qualified as an “administrative claim”. (d) “Creditor” means any natural or legal person or partnership who owns a claim against the debtor or assets of the debtor. (c) “Company” means a limited company formed under the Law of Commercial Enterprises. (d) “Costs of the proceedings” and “costs of the resumed proceedings” mean the court’s fees and costs and the remuneration, fees and expenses of the provisional administrator and administrator. (e) “Court” means a court which, under the laws of the Kingdom of Cambodia, has jurisdiction over insolvency proceedings opened under this Law. (f) “Debtor” means any natural or legal person who is engaged in a business enterprise and who may be made a subject of insolvency proceedings under this Law. (g) “Partnership” means a general or limited partnership formed under the Law of Commercial Enterprises.
i. in the case of a debtor which is not a natural person, any shareholder, director, partner or manager of the debtor; ii. the debtor’s spouse or, in the case of a debtor which is not a natural person, the spouse of any shareholder, director, partner or manager of the debtor; iii. any ascendant or descendant of the debtor or of any person described in paragraphs (i) and (ii); iv. the spouse of any person described in paragraph (iii); v. any sibling, or the spouse of any sibling, of the debtor or of any person described in paragraphs (i) to (iv); vi. any company in which a person described in paragraphs (i) to (v) holds more than five percent of the shares, or is a director or a manager; vii. any partnership in which a person described in paragraphs (i) to (v) is a partner or a manager; viii. any legal person formed under the laws of a foreign country in which a person described in paragraphs (i) to (v) holds more than five percent of the capital, or is a director, a manager or a partner; ix. in the case of a debtor who is a natural person, any person living in the debtor’s household; x. any natural or legal person who, by reason of its professional or commercial relationship with the debtor, has access to non-public information about the financial or commercial affairs of the debtor; or xi. any creditor whose claim against the debtor exceeds ten percent of the total value of all creditors’ claims against the debtor. Article 3. Appeals; Applicable Norms of Civil Procedure (a) In the case of a ruling of the court made under this Law, an appeal shall not operate as a stay on the execution of the court’s ruling. (b) Unless this Law contains special provisions, the provisions of the Code of Civil Procedure shall apply mutatis mutandis. CHAPTER 2 OPENING OF INSOLVENCY PROCEEDINGS – SUBJECTS, GROUNDS AND PETITION Article 4. Subjects of Insolvency Proceedings (a) Subject to paragraphs (b) and (c), insolvency proceedings may be opened under this Law against a debtor who is: i. a partnership or company; ii. a natural person who is domiciled in the Kingdom of Cambodia; iii. a legal person or partnership formed under the laws of a foreign country which owns assets situated in the Kingdom of Cambodia; and iv. a natural person who is domiciled outside the Kingdom of Cambodia and who owns assets situated in the Kingdom of Cambodia. (b) Insolvency proceedings opened under this Law against the persons or partnerships set out in paragraphs (a)(iii) and (a)(iv) shall apply only to the assets of such persons or partnerships which are situated in the Kingdom of Cambodia. The following shall be considered assets situated in the Kingdom of Cambodia: i. tangible assets located within the territory of the Kingdom of Cambodia; ii. assets and rights for which the ownership of or entitlement to must be entered in a public register under the authority of the Royal Government of Cambodia; and iii. claims against any person or partnership which has the center of its main interests in the Kingdom of Cambodia. In the absence of proof to the contrary, any person or partnership engaging in trade in the Kingdom of Cambodia shall be presumed to have the center of its main interests in the Kingdom of Cambodia. (c) Insolvency proceedings shall not be opened under this Law against any debtor which is a covered entity under the Law on Banking and Financial Institutions. (d) With respect to the insolvency, liquidation and dissolution of companies and partnerships, in the event of conflict between the provisions of this Law and the provisions of the Law on Commercial Enterprises or any other law, the provisions of this Law shall prevail. Article 5. Grounds for the Opening of Insolvency Proceedings (a) In the case of a petition by the debtor, a creditor or creditors, the failure of a debtor to meet one or more valid and mature obligations, other than obligations which give rise to claims of the kind mentioned in Article 35(c) to Article 35(i), to pay an aggregate amount in excess of Riels 5,000,000 shall be a ground for the opening of insolvency proceedings with respect to the debtor. The Minister of Commerce may, by regulation, change the minimum amount of obligation required for the opening of insolvency proceedings set out in the first sentence of this paragraph. (b) In the case of a petition by the debtor, a determination made by the debtor in good faith that it is likely to be unable to meet valid obligations of the kind mentioned in paragraph (a) to pay amounts totaling more than Riels 5,000,000 on the respective maturity dates of those obligations shall also be a ground for the opening of insolvency proceedings with respect to the debtor. Article 6. Petition to Open Insolvency Proceedings (a) A petition to open insolvency proceedings may be filed by a debtor, one or more creditors, the Minister of Commerce, the Director of Companies or the public prosecutor. (b) A petition to open insolvency proceedings shall be made in writing and shall be signed by the petitioner. The petition shall contain the following information: i. the name and address of the debtor; ii. the name and address of the petitioner, if it is not the debtor; iii. the ground or grounds under Article 6 on which the petition is based; iv. a description of the circumstances showing the existence of the ground or grounds for the petition; v. evidence on which the petition is based, including an attachment of any documents which could substantiate the petition; and vi. in the case of a petition by the debtor, a list of all known creditors of the debtor, indicating the names of the creditors, their addresses and the amounts of their respective claims. Article 7. Duty to Petition for the Opening of Insolvency Proceedings (a) A debtor that has ceased to meet any of its mature and valid obligations of the kind mentioned in Article 6(a) to pay shall, within thirty days of such cessation, petition for the opening of insolvency proceedings against itself, if the aggregate of such mature obligations exceeds the amount stipulated under Article 6(a). (b) In the case of a debtor who is a natural person, it shall be his duty to ensure that a petition is filed pursuant to paragraph (a). In the case of a debtor which is a partnership or a company, it shall be the duty of every individual director, partner or manager, as the case may be, to ensure that a petition is filed pursuant to paragraph (a). (c) Any person who, intentionally or with gross negligence, fails to discharge the duty under paragraph (b) shall be personally liable to the debtor’s creditor or creditors for damages that result directly from such failure. If the duty under paragraph (b) falls on more than one person, all such persons, acting intentionally or with gross negligence, shall be jointly and severally liable for damages that result directly from the failure to observe the duty. Should insolvency proceedings be commenced against the debtor, such damages shall be included in the estate and the administrator shall act on behalf of all creditors in their recovery. Article 8. Service of Petition A creditor’s petition, or a petition by the Minister of Commerce, Director of Companies or public prosecutor, shall be served on the debtor no later than seven days after the petition has been filed with the court. Article 9. Appointment of Provisional Administrator to Protect the Estate (a) From the time of the filing of a petition to the court’s issuance of its ruling whether to open insolvency proceedings, the court shall, upon the written application of the debtor, any creditor, the Minister of Commerce, the Director of Companies or the public prosecutor, issue a ruling to appoint a provisional administrator. (b) The provisional administrator shall take all necessary or appropriate measures to protect the interest of creditors. In particular, he may apply, if necessary and unless the court so rules on its own motion, to the court for injunctive relief operating a freezing of assets or a stay of action by secured or unsecured creditors against the debtor or assets of the estate. The provisions of Chapter 10, Part A shall apply, mutatis mutandis, to a provisional administrator. (c) Any rulings of the court made under paragraphs (a) and (b) shall immediately be published, including in the Official Gazette of the Kingdom of Cambodia. Such rulings shall also immediately be notified to and/or filed with the necessary public registries or filing offices, including those registries or filing offices governing security interests. CHAPTER 3 DECISION ON THE PETITION TO OPEN INSOLVENCY PROCEEDINGS Article 10. Hearing of the Petition (a) A petition by the debtor shall be heard by the court as soon as possible after it is filed and in any event no later than seven days after the petition is filed. (b) A petition by a creditor, the Minister of Commerce, the Director of Companies or the public prosecutor shall be heard by the court no later than fourteen days after the petition has been served on the debtor. (c) The debtor, any creditor, the Minister of Commerce, the Director of Companies and the public prosecutor shall be entitled to participate in the hearing. Article 11. Ruling on the Petition (a) If the court is satisfied, after the hearing of the petition, of the existence of the ground or grounds on which the petition is based, the court shall issue a written ruling: i. opening insolvency proceedings against the debtor; ii. appointing an administrator, who will normally be the provisional administrator appointed under Article 10 (if any); iii. announcing a date for the opening creditors’ meeting, which shall be on a day no earlier than thirty but no later than sixty days after the opening of the insolvency proceedings; and iv. specifying the deadline for the filing of proofs of claims, which shall be seven days before the date of the opening creditors’ meeting. (b) In determining the date of the opening creditors’ meeting, the court shall take into account whether the debtor has submitted a proposed plan of compromise which the debtor represents has the support of creditors required for the approval of a plan of compromise under Article 44. (c) If the court is satisfied, after the hearing of the petition, that the ground or grounds on which the petition is based do not exist or, in the case of a petition by the debtor or by a creditor acting in concert with the debtor, that the debtor’s failure to meet his obligations is frivolous or was made in bad faith, the court shall issue a written ruling dismissing the petition. (d) The court’s ruling to open insolvency proceedings or to dismiss the petition shall be issued no later than fourteen days after the hearing of the petition. (e) The debtor or any creditor may appeal the court’s ruling made under this article within seven days after the issuance of the ruling. Article 12. Commencement of Liquidation by the Court (a) The court may, when it issues the ruling to open insolvency proceedings, or at any time thereafter, rule that the liquidation of the debtor’s business be commenced forthwith on the ground that the rehabilitation of the debtor’s business is not feasible and that it is unlikely that a plan of compromise will be approved. (b) The court may make a ruling under paragraph (a) either on its own motion or upon the application of the debtor, the administrator, any creditor, the Minister of Commerce, the Director of Companies or the public prosecutor. Article 13. Date of Opening of Insolvency Proceedings The insolvency proceedings shall be considered opened on the date of the court ruling opening the insolvency proceedings. Article 14. No Opening of Insolvency Proceedings for Lack of Assets (a) Insolvency proceedings shall not be opened and the petition shall be dismissed if the debtor’s assets will likely be insufficient to cover the costs of the proceedings, unless a sufficient amount of money is advanced to cover such costs. (b) Anyone advancing an amount of money under paragraph (a) may, within five years from the time the amount is advanced, claim reimbursement of the advanced amount from any person who, in contravention of this Law or other law, failed to discharge his duty to petition for the opening of insolvency proceedings against the debtor at the time the petition was filed. In the event of a dispute as to whether such person failed to discharge his duty, such person shall bear the burden of proving that he did not fail to discharge his duty. Article 15. Costs for a Dismissed Petition When dismissing a petition for lack of grounds, the court shall also issue a ruling requiring the petitioner to reimburse the debtor, or the creditors, as the case may be, for all reasonable legal costs incurred by such party or parties in attending to the petition. If the court finds that the petition was filed frivolously, maliciously or with intent to do wrongful harm to the debtor or creditors, the court may further rule that the petitioner be held liable to such party or parties for all damages incurred by the party or parties as a result of the petition. Article 16. Publication and Notification of the Opening of Insolvency Proceedings (a) A court ruling opening insolvency proceedings shall immediately be published, including in the Official Gazette of the Kingdom of Cambodia. The court ruling opening insolvency proceedings shall also immediately be notified to and/or filed with the necessary public registries or filing offices, including those registries or filing offices governing security interests. (b) No later than seven days after the opening of the insolvency proceedings, the administrator shall publish notices, including by placing advertisements in at least two major newspapers in the Kingdom of Cambodia, announcing the following: i. that insolvency proceedings have been opened against the debtor; ii. the deadline for the submission of written proofs of claims and the address to which all written proofs of claims should be sent; and iii. the date, time and place for the opening creditors’ meeting. (c) No later than seven days after the administrator receives the statement of the debtor filed pursuant to Article 28, the administrator shall notify in writing all creditors listed in the statement of the matters set out in paragraphs (b)(i) to (b)(iii).
CHAPTER 4 EFFECTS OF THE OPENING OF INSOLVENCY PROCEEDINGS Part A – General Effects
Article 17. Stay of
all other Proceedings
(b) The administrator may, however, whenever it is in the best interest of the estate, allow a secured creditor in writing to foreclose his mortgage, repossess and sell an encumbered asset (collateral), or in any other way avail himself of his security right and make himself paid by individual action. (c) In the case of insolvency proceedings opened against a debtor which is a general partnership or a limited partnership, the stay of action in paragraph (a) shall also apply to any action, proceedings or execution process for debt of the debtor against a partner or general partner of the debtor, respectively, and against the partner’s assets. Only the administrator or provisional administrator may claim a partner’s personal liability for the debtor’s debts during such insolvency proceedings. (d) The stay of action under paragraph (a) shall not apply to administrative claims pertaining to the remuneration, fees and expenses of the provisional administrator or administrator and other administrative claims incurred by the provisional administrator or administrator. Article 18. The Estate (a) The opening of the insolvency proceedings shall create the estate. (b) The estate shall comprise all assets, rights and claims of any kind in which the debtor has an ownership interest or to which the debtor is otherwise entitled on the date of opening of the insolvency proceedings or after that date, with the exception of, in the case of a debtor who is a natural person: i. the primary place of residence of the debtor, the market value of which shall not exceed Riels 20,000,000; ii. personal clothing of the debtor, the aggregate market value of which shall not exceed Riels 400,000; and iii. any other asset, right or claim which is exempt from execution against the debtor under the Code of Civil Procedure. Article 19. Vesting of Estate in the Administrator The management and power over all assets in the estate shall vest in the administrator. Article 20. Duty of Debtor to Cooperate with Administrator The debtor shall cooperate fully with the administrator and shall provide the administrator with all necessary information pertaining to the business of the debtor. Article 21. Powers of the Administrator (a) In order to discharge his duties, an administrator shall, inter alia, have the power to: i. represent the debtor and manage the debtor’s business for the purposes of the insolvency proceedings; ii. receive the debtor’s mail and any electronic communications addressed to the debtor with the exception of mail and communications which are manifestly of a private nature; iii. carry on the business of the debtor, but only to the extent necessary to fulfill the objectives of the insolvency proceedings; iv. receive all assets of the estate, including the books and records of the debtor; v. collect and include in the estate any amounts remaining unpaid with respect to the issued share capital of a debtor or contributions to the debtor by partners; vi. use and deal with the assets of the estate, including by selling any such asset free of any security rights, encumbrances and liens; vii. assume, commence, prosecute, defend, abandon or settle any court proceedings in which the debtor is a party and which relates to assets of the estate; viii. permit a creditor to sell an asset which is the object of a security right held by the creditor for a claim, and to apply the relevant proceeds of the sale in satisfaction of the creditor’s claim; ix. abandon assets which are burdensome for the estate; x. apply to the court to examine, under oath before the court, any person on questions pertaining to the debtor’s business; xi. terminate, cancel or avoid, in accordance with this and other laws, and including by application to the court, any transaction, contract, agreement or transfer to which the debtor is a party; xii. convene and organize the meetings of creditors as provided for in this Law; xiii. prepare and propose a plan of compromise, where appropriate; xiv. employ the services of agents and professionals to assist in the performance of his duties; and xv. do any and all other things necessary to the performance of his duties and which are consistent with the objectives of the insolvency proceedings. (b) The Minister of Commerce may issue regulations to supplement the provisions in paragraph (a) regarding the administrator’s powers. Article 22. Examination of the Debtor and its Activities (a) During the period up to the opening creditors’ meeting, the administrator shall: i. continue the debtor’s business, whenever this appears to be feasible and not manifestly uneconomic; and ii. explore the financial and economic situation of the debtor and its prospects of rehabilitation and prepare the administrator’s report referred to in Article 51. (b) In discharging his tasks, the administrator shall make the fullest possible use of the support, experience and information of the debtor and the management of the debtor, as the circumstances permit. Article 23. Transactions which Require the Consent of Creditors (a) The administrator shall obtain the consent of the creditors at a creditors’ meeting if he intends to: i. sell any real property by private treaty; ii. sell or transfer any part of the estate to a related person by any means; or iii. to carry out any transaction that would irreversibly preclude the proposal, approval or implementation of a plan of compromise, unless such transaction is to be carried out after the commencement of the liquidation of the estate. (b) Any transaction undertaken in violation of paragraph (a) shall be deemed a violation of the administrator’s duties and expose the latter to personal liability for any damage incurred by the estate or any party in the proceedings. Article 24. Determination of Secured Status of Claims (a) No later than thirty days after the opening of insolvency proceedings, the administrator shall determine in good faith the value of any security right held by a creditor in an encumbered asset of the estate. The administrator’s valuation shall, unless challenged by the debtor or any creditor, be the valid determination of the amount of the secured portion of that creditor’s claim. (b) Unless the security right was granted by the debtor to secure a debt of a person, company or partnership other than the debtor, the portion of the creditor’s claim which exceeds the value determined under paragraph (a) or which remains unsatisfied after the application of the proceeds from a sale of the asset, as the case may be, shall be eligible for satisfaction in the insolvency proceedings as an unsecured claim. (c) A valuation under paragraph (a) shall not be necessary if, before the expiration of the stated thirty days: i. the court has ordered the commencement of the liquidation of the debtor’s business; or
Article 25. Protection for Secured Creditors (a) The administrator shall pay, to a creditor holding a security right in an asset of the estate, on a regular basis all interest accruing at the contractual rate on the secured portion of the claim as determined under Article 25. If the security right was granted to secure a debt of a person, company or partnership other than the debtor, interest accruing on the secured portion of the claim shall, however, be paid only when the third party owing payment to the creditor is in default. (b) In the absence of a contractual rate of interest, interest shall be calculated at the generally prevailing market rate. (c) Interest pursuant to paragraph (a), which shall be paid at least once every month, shall be applicable only upon the expiration of thirty days after the opening of insolvency proceedings and for so long as the asset is not sold by the administrator and the relevant proceeds of the sale applied in satisfaction of the creditor’s claim, or for so long as the creditor has not been permitted to sell the asset or to foreclose his security right in exercise of his security right. Article 26. Maintenance Payments from the Estate (a) The court may decide whether and to what extent a debtor who is a natural person and the debtor’s family should be provided with current maintenance from the estate. (b) Until the court’s decision under paragraph (a), the administrator may, with the consent of any creditors’ committee that has been set up, provide necessary maintenance from the estate to a debtor who is a natural person and to the debtor’s family. Article 27. Duty of Debtor to Provide Information (a) No later than fourteen days after the opening of insolvency proceedings, the debtor shall file with the court and provide to the administrator a written statement setting out full details of: i. the estate; and ii. all creditors known to the debtor, including the creditors’ names, addresses and a brief description of the debt owed to each creditor. (b) The debtor shall submit to examination regarding its assets and business affairs as and when required by the provisional administrator, the administrator or the court. Part B – Safeguarding and Enhancement of the Estate Article 28. Treatment of Contracts (a) If, at the time of the opening of insolvency proceedings, a contract between the debtor and a counter party has not been fully performed by the debtor and the counter party, the administrator may elect to continue the contract in accordance with the terms of this article. (b) An administrator who has decided to continue a contract must declare this decision in writing to the counter party within thirty days of the opening of insolvency proceedings. In the absence of such a written declaration from the administrator, the contract shall be deemed terminated and the counter party may file a claim for damages as a creditor in the insolvency proceedings. The court may, upon a written application of the administrator, extend the period within which the administrator must declare his decision whether to continue the contract. Each extension shall be for no more than fourteen days. (c) The counter party to a contract may, at any time, also make a written request to the administrator that the administrator declare himself bound by the contract. In the absence of a written declaration from the administrator to be bound by the contract within seven days of the counter party’s request, the contract is deemed terminated and the counter party to the contract may file a claim for damages as a creditor in the insolvency proceedings. The court may, upon a written application of the administrator, extend the period within which the administrator must declare his decision whether to be bound by the contract. Each extension shall be for no more than fourteen days. (d) In the case of individual contracts for the sale or purchase of securities, rights or other similar goods in a market or stock exchange which are part of a larger framework agreement for the consolidated settlement of the individual contracts, the administrator’s election to continue with contracts shall be made with respect to all the individual contracts under the framework agreement as a whole. The administrator may not elect to continue with only some of the individual contracts under the framework agreement. (e) The administrator’s election to continue a contract which requires regular payments to the counter party shall not bind the administrator to effect payments that were not made prior to the opening of insolvency proceedings. (f) All claims arising from a contract which the administrator has elected to continue shall be treated as administrative claims incurred by the administrator in the course of the insolvency proceedings and accorded the applicable priority under Article 56. Article 29. Utilities Service to the Debtor (a) A utility may not terminate, alter or discontinue service to the administrator or the debtor solely on the basis of the opening of insolvency proceedings against the debtor or that a debt owed by the debtor to such utility for service rendered before the opening of insolvency proceedings was not paid when due. (b) Without prejudice to the right of the administrator to elect continuation of a pending contract according to Article 29, a utility may refuse to conclude a new contract for service to a debtor if the administrator does not, within thirty days after the opening of insolvency proceedings, furnish adequate assurance of payment, in the form of a deposit or other security, for service under an eventual new contract after the opening of insolvency proceedings. Article 30. Avoidance of Certain Prejudicial Transactions The court may, upon a complaint by the administrator and upon a hearing of the other party to a certain transaction adjudicate by judgment the following transactions to be void and pronounce the appropriate effects of such declaration under Article 32: (a) a transaction entered into by the debtor with the intent to defraud creditors by placing the debtor’s assets beyond the reach of creditors who may seek to recover claims owed by the debtor, provided that the other party to the transaction knew of the debtor’s said intent; (b) a transaction effected within three years prior to the opening of insolvency proceedings for which no consideration was received by the debtor in return, except for ordinary transactions in favor or the debtor’s spouse or relatives of direct descent or ascent; (c) a transaction effected within one year prior to the opening of insolvency proceedings in which the value of the debtor’s obligation considerably exceeded the value of the other party’s obligation; (d) a transaction effected within one year prior to the opening of insolvency proceedings in which the debtor discharged a debt which was not due, or provided new or additional security for a debt, and in which the other party to the transaction is a related person; (e) a transaction effected within six months prior to the opening of insolvency proceedings in which the debtor discharged a debt which was not due, or provided new or additional security for a debt; and
(f) a
transaction effected within one year prior to the opening of
insolvency proceedings in which the debtor discharged, or granted a
security right, for a debt of the kind mentioned in Article 35(e). (a) Where a transaction or transfer is avoided under REF _Ref12617121 \r \h Article 31, any money paid, property transferred or proceeds from the sale of property transferred shall be recovered and included in the estate. (b) A person from whom money or property was recovered as a result of an avoided transaction shall be entitled to restitution for any consideration given by such person for the transaction. Restitution shall be effected from the assets of the estate to the extent that the consideration given continues to exist in a distinct form among the assets of the estate. Such person shall also be eligible to file a claim as a creditor in the insolvency proceedings. Article 32. Set-Off (a) If, by force of law or on the basis of a contract, a creditor would have had a right, on the date of the opening of the insolvency proceedings, to set-off his claim in the proceedings against an obligation owed to the debtor, such right of set-off shall not be affected by the opening of the insolvency proceedings. (b) Set-off shall not be excluded by reason of the fact that the claims or obligations are in different currencies or units of exchange, if such currencies or units of exchange can be freely converted at the place of payment of the claim or obligation against which set-off is to be declared. Conversion shall be at the rate of exchange at such place at the time of the receipt of the declaration of set-off. (c) Set-off by a creditor against a counter claim of the estate shall be void if: i. the creditor only became a debtor of the estate after the opening of insolvency proceedings; ii. the creditor acquired his claim from another creditor after the opening of the insolvency proceedings; iii. the creditor acquired the right of set-off by means of a transaction which is subject to contest or avoidance under this or other laws; or iv. the creditor's claim is f the kind mentioned in Article 35. Part C – Claims Article 33. Admissible Claims (a) The estate shall be used to satisfy all admissible claims against the debtor and administrative claims. Administrative claims shall include the remuneration, fees and expenses of the administrator, costs of the insolvency proceedings such as court fees and all claims incurred by the administrator in the course of the proceedings. (b) Claims that are not mature on the date of opening of the insolvency proceedings shall be deemed to have matured upon the opening of the insolvency proceedings. (c) Claims that are subject to a resolutory condition shall be treated as unconditional claims as long as the condition has not been satisfied. Article 34. Inadmissible Claims The following claims shall not be admissible in insolvency proceedings: (a) interest accruing on claims from the date of the opening of the insolvency proceedings; (b) costs incurred by creditors by reason of their participation in the insolvency proceedings; (c) fines, administrative penalties and other incidental legal consequences of a criminal or administrative offence which obliges the debtor to pay money; (d) claims for which no consideration was owed by the debtor in return; (e) claims for the repayment of a loan made, or caused to be made, to the debtor by a person or partnership holding directly or indirectly not less than ten percent of the equity capital of the debtor, or recourse claims against the debtor for a loan guaranteed or secured, or caused to be guaranteed or secured, by such a person or partnership. If the debtor is a partnership, the subordination of claims in this paragraph shall apply only when all general partners of the debtor are companies or otherwise of limited liability; (f) claims for recourse which co-debtors or guarantors may have against the debtor if they satisfy a creditor’s claim, unless the creditor fully waives his claim for the purposes of the insolvency proceedings; (g) claims for which the proofs of claim were filed after the deadline established for the filing of proofs of claims; (h) claims for which subordination in insolvency proceedings has been agreed between the creditor and the debtor; and (i) interest on claims of the aforementioned kind. Article 35. Conversion of Claims Non-liquidated claims shall be satisfied at the value estimated in Riels on the date of the opening of the insolvency proceedings. Claims denominated in foreign currency or in some other unit of exchange shall be converted into Riels using the exchange rate prevailing on the date of the opening of the insolvency proceedings. Article 36. Filing of Proofs of Claims (a) All proofs of claims shall be submitted in writing by creditors to the administrator by the determined deadline. (b) Each proof of claim shall contain the following information: i. the legal nature and cause of the claim; |