Insolvency Act, 2016

This section says the Act may be cited as the Insolvency Act.

This section defines key terms used in the Act.

This Act does not apply to financial institutions unless the Financial Services Act says otherwise.

This section creates the Director of Insolvency and assigns that office responsibility for administering and applying the Act.

The Minister must designate a suitable person or office as the Official Receiver, and the Chief Justice must make rules setting a mandatory threshold and procedure for certain small bankruptcies and voluntary arrangements.

The Official Receiver has legal personality and several powers, including suing and being sued, administering oaths, appearing in court, and executing documents.

A person cannot act as Official Receiver for a debtor’s estate if they are a creditor there, and the Minister must appoint a suitable replacement when that disqualification happens.

The Director must keep a register of insolvency practitioners, and practitioners must notify the Director of appointment, ceasing office, and certain suspensions or removals.

The Director must monitor insolvency practitioners and can require information, investigate suspected misconduct, and compel cooperation from specified people.

The Director may apply to the Court for a prohibition order against an insolvency practitioner if there is reasonable ground to think the practitioner is unfit to act.

Certain agents, trustees, and auditors must disclose company information to the Director in specified financial distress situations, and they may later consult with the Director about how to address the company’s difficulties.

The Director must keep and maintain two public registers: one for discharged and undischarged bankrupts, and one for persons subject to an individual voluntary arrangement.

This section defines when a company is in or enters company reorganization, and says it does not stop being in reorganization just because an administrator leaves office or is removed.

The administrator must carry out functions to rescue the company, improve creditor outcomes, or realize property for distribution, and must do so as quickly and efficiently as reasonably practicable.

An administrator must be an officer of the Court.

A person may be appointed as administrator only if qualified to act as an insolvency practitioner in relation to the company.

The Court must make a company reorganization order only if two conditions are met: the company is unable, or likely to become unable, to pay debts as they fall due, and the order is reasonably likely to achieve the section 14 objective.

Only the company, its directors, one or more company creditors, or a combination of them may apply for a company reorganization order. The applicant must notify certain persons soon after filing, and the application cannot be withdrawn without a court order.

The Court may decide what to do with a company reorganization application, including making the order, dismissing it, adjourning it, or making interim and other appropriate orders.

This section applies when a company reorganization application is made by a holder of a qualifying security interest and says the application relies on this section.

A holder of a qualifying security interest may apply for company reorganization, and the Court must grant the subsection (1)(b) application unless it decides refusal is justified by the case’s particular circumstances.

The holder of a qualifying security interest, and the company’s liquidator, may apply for a company reorganization order/application in the circumstances stated. If the Court grants the order, it must discharge the winding-up order and make related orders and specifications.

If a company reorganization order is sought after a receiver has been appointed, the Court must dismiss the application unless one of the stated consent or security conditions applies.

A winding-up petition for a company must be dismissed when a company reorganization order is made for that company.

A receiver must leave office when a company reorganization order takes effect, and a receiver of part of the company’s property must also leave office if the administrator requires it.

A company in company reorganization is protected from winding-up resolutions and winding-up orders.

A landlord cannot use peaceable re-entry to forfeit premises let to the company unless the administrator consents or the Court अनुमति permits it.

This section creates an interim moratorium tied to a company reorganization application.

During company reorganization, documents issued by or for the company or administrator must state the administrator’s name and that the company’s affairs, business, and property are being managed by him.

When a person becomes an administrator, the administrator must give notices of the appointment and take certain related steps.

The administrator must require relevant persons to provide a statement of the company’s affairs, and the statement must follow prescribed form and content rules.

A person required to submit a statement of affairs must file it within the prescribed period starting when notice is received.

The administrator must prepare proposals for company reorganization and send a copy to specified recipients within the required time.

A creditors’ meeting is a meeting of company creditors summoned by the administrator with prescribed notice, and it must be conducted under the Rules.

Administrators must present the statement of proposals at an initial creditors’ meeting, and must summon that meeting when requested by qualifying creditors.

The initial creditors’ meeting must consider the administrator’s proposals, may approve them with or without modification, and the administrator must report any decision to specified persons after the meeting.

If an administrator wants to make a substantial revision after proposals were already approved, the administrator must call a creditors’ meeting, circulate the revision statement, and report the meeting’s decision to specified recipients.

If an administrator reports that creditors did not approve the proposals, the Court may make orders about the administrator’s appointment, adjourn the hearing, make an interim order, or make any other appropriate order.

The administrator must summon a creditors’ meeting if enough creditors request it in the prescribed manner or if the Court directs it.

A creditors’ meeting may set up a creditors’ committee, and that committee may require the administrator to attend and provide information.

Some matters that would normally be done at a creditors’ meeting may instead be done by correspondence between the administrator and creditors, if the Rules are followed and any prescribed conditions are met.

The administrator has broad powers to manage the company and can take listed steps, but a company or officer in reorganization may not use a management power without the administrator’s consent.

The administrator may make distributions to creditors, but payments to unsecured or preferential creditors by way of distribution need Court permission.

The administrator must take control of company property on appointment, manage the company according to approved proposals and allowed revisions, and obey court directions if given. The Court may issue directions only in the stated circumstances.

An administrator must act as the company’s agent when exercising functions under the Act.

An administrator may deal with property subject to a qualifying security interest as if the security interest did not apply, and the security holder keeps the same priority in the acquired property.

The Court may allow an administrator to sell property despite a non-qualifying security interest if the sale would help company reorganization. The administrator must apply for the order, and if successful must send a copy of the order to the Director and Registrar of Companies within the prescribed period.

An administrator’s statement of proposals must not include actions that harm secured creditors’ enforcement rights or change the priority or proportion of payment for preferential debts, unless a creditor consents or the proposal is to be sanctioned under section 156.

A creditor or member in company reorganization may ask the Court to intervene against an administrator’s conduct, and the Court can make a range of orders unless the order would block certain approved arrangements or proposals.

The Court may examine an administrator’s conduct if one of the listed people applies, and it may order repayment, restoration, accounting, interest, or compensation.

An administrator’s appointment normally ends after six months, but the Court can extend the term in specified circumstances, and consent-based extensions have their own limits and notice requirements.

If an administrator applies, the Court may end the administrator’s appointment from a specified time. The administrator must apply if certain conditions are met, and the Court may make several kinds of orders on the application.

An administrator may file a notice that company reorganization has achieved its purpose, and then must send copies of that notice to known creditors within the prescribed period.

A creditor may ask the Court to end an administrator’s appointment, and the Court can make several orders in response.

Where this section applies, the Court may end or continue the administrator’s appointment, and if it continues the Court may limit the administrator’s powers or modify how the Act applies to them.

If the administrator thinks the secured creditors have been paid or set aside and unsecured creditors may receive a distribution, the administrator must notify the Director and Registrar; the notice must then be registered, and the company moves into winding-up.

If the administrator believes the company has no property for a distribution to creditors, notices must be sent and filed; the company is then deemed dissolved after the prescribed period unless the Court disapplies or adjusts that result.

When company reorganization ends, the Court must discharge the company reorganization order.

If a court order ending the administrator’s appointment takes effect under this Act, the administrator must send a copy of that order to the Director and the Registrar of Companies.

An administrator may resign only in prescribed circumstances, and only by giving written notice to the Court.

The Court may order that an administrator be removed from office.

An administrator must vacate office if they stop being qualified to act as an insolvency practitioner for the company, and must give written notice to the Court.

If an administrator dies, resigns, is removed, or vacates office, the Court may replace the administrator on application by certain listed parties.

A person who stops being an administrator is discharged from liability for actions taken as administrator, subject to how the discharge takes effect.

When an administrator leaves office, certain remuneration, expenses, and pre-cessation liabilities are paid from property the administrator controlled before cessation.

This section says references to appointing an administrator include appointing multiple people to act jointly or concurrently, and a reference to appointing a person as administrator can include one of those multiple people.

If two or more people are appointed as joint administrators of a company, they are treated as acting together for this section, and an omission offence by the administrator can be attributed to each of them individually.

This section applies when two or more people are appointed to act together as administrator, and any reference to “the administrator” includes any of them or any combination of them.

A company in reorganization may have a joint or concurrent administrator appointed.

An administrator’s act remains valid even if there is a defect in the administrator’s appointment or qualification.

In this Act, a reference to something done by directors includes the same thing done by a majority of the directors.

The Court may vary or extend a time period for a company if the Act allows it and the administrator applies.

The administrator may vary certain specified periods for a company with consent, and any extension power is tightly limited.

If a period is extended under section 72 or 73, any reference to that period means the period as extended.

A receiver may be appointed under a security instrument or by the Court, but not in some company reorganization situations.

A person cannot be appointed as a receiver if they fail the listed qualification tests, unless the Court orders otherwise.

A secured party may appoint a receiver, and the section also allows multiple or successor receivers unless the instrument says otherwise.

The Court may appoint a receiver, or a receiver and manager, for secured property in defined circumstances, and a receiver is normally also appointed as receiver and manager unless the Court says otherwise.

A receiver must give written and public notice of the appointment within the prescribed period, send a copy to the Director and the Registrar of Companies, and include a statement if the appointment is replacing or adding to another receiver.

When a receiver is appointed, covered agreements and documents must clearly say so.

A receiver’s office becomes vacant on resignation, death, or disqualification, and specific notice, resignation, and assistance duties apply when a vacancy occurs.

A receiver has the powers given by the appointing instrument or court order, and may also exercise the powers in the Rules, subject to that instrument or order.

A receiver may sign and execute company documents needed for the receiver’s powers, and may do so by using the company seal when authorized to use it.

When a receiver is appointed for a company, the company and its directors must provide records and information, help the receiver, and submit a statement of affairs.

A receiver’s acts and transactions are not invalid just because the receiver was not properly appointed, is disqualified, or lacks authority, subject to a knowledge-based exception.

If a mortgagee’s consent is needed for a sale in receivership and the receiver cannot get it, the receiver may ask the Court to authorize the sale. The Court may grant the order if stated conditions are met.

A receiver must act in good faith, protect specified interests, keep records and money separate, and may include storage costs in remuneration claims.

A receiver must prepare a report after appointment and include specified details about the receivership property, creditors, debts, liabilities, and related matters. The receiver may leave out proposed disposal details if including them would materially prejudice the receiver’s functions.

A receiver must file a further report at prescribed intervals and when the receivership ends.

A person who must prepare a report under sections 88 or 89 may get more time to do it if they apply, and the extension may be granted by the Court or the Registrar of Companies depending on how the receiver was appointed.

This section says who must receive reports prepared under sections 88 or 89, and gives some people a right to inspect them.

A receiver who thinks the company, director, or officer committed an offence under the Companies Act or Securities Act must report it to the Director and the Registrar of Companies right away.

When a receivership ends, the former receiver must send or deliver written notice of that fact to the Director and the Registrar of Companies within the prescribed period.

A receiver must pay received money to the secured party, subject to priority rights for certain other persons, and keep enough funds or property to cover those priority claims.

A receiver may keep acting over liquidated company property, but the Court can override this. After winding-up starts, a receiver cannot be appointed for the company’s property unless the Court orders it. A receiver may act as the chargor’s agent only with written Court approval or the liquidator’s consent.

A receiver is personally liable for certain contracts, wages, and rent-related payments, but the Court can extend deadlines or limit/excuse that liability in some cases.

The Court may excuse a receiver from personal liability if the appointment or court order was defective and the receiver acted honestly and reasonably.

The Court may supervise a receiver by giving or changing directions, reviewing remuneration, ordering refunds, deciding appointment/possession issues, and removing a receiver’s protection from claims in some cases.

The Court may end or narrow a receivership if the debtor company or liquidator applies, but only if the receivership’s purpose has been met as far as possible or its continuation is no longer justified.

This section lets certain people ask the Court to enforce a receiver’s duties, and lets the Court order compliance or impose restrictions on a receiver.

When the Court removes a receiver from office, it may make orders to protect the property in receivership and may require the receiver to provide information and documents.

A supplier of an essential service must not refuse service, or require payment of old charges, for a receiver or owner of property in receivership because of pre-receivership default.

Some bodies corporate with assets in Malawi may be wound up under this Part, unless a specific Malawi written law already provides for their winding-up.

Foreign companies may be wound up under this Part, but only on a petition to the Court, and the Court may order winding-up if listed conditions are met.

A company may be wound up by a court order or by a voluntary winding-up started by company resolution.

This section sets when a company winding-up is treated as starting and requires the relevant court, board, or shareholders to record the date and time of the liquidator appointment or special resolution.

A company may be wound up by court order on petition under this section, and the section lists who may present the petition and when the Court may hear it.

A petitioner who is not a company or liquidator must prosecute the winding-up proceedings at their own cost until a liquidator is appointed; the liquidator must usually reimburse reasonable costs, unless the Court directs otherwise.

The Court may decide how to handle a winding-up petition, including granting it, dismissing it, adjourning it, or making other orders.

The company, a creditor, or a member may ask the Court to stop pending proceedings against the company, and the Court may do so. After a winding-up order or provisional liquidator appointment, proceedings against the company cannot continue or start unless the Court gives leave and sets terms.

After winding-up starts, certain company property dealings and enforcement actions are void unless the Court directs otherwise.

A petitioner must, within the prescribed period after a winding-up order is made, lodge, deliver, and serve copies of the order and related details on the Director, Official Receiver, company secretary or other person directed by the Court, and the liquidator.

The Court may appoint a provisional liquidator before a winding-up order, and the provisional liquidator must take control of the company’s property.

When a provisional liquidator is appointed or a winding-up order is made, the liquidator must take company property into custody or control; the court can order property vested in the liquidator; banks and other holders must hold the property for the liquidator’s discretion; and the liquidator must file copies of vesting orders with the Director and, for land, with the Land Registrar or Deeds Registrar.

The liquidator must receive the company’s statement of affairs, file and distribute copies, and the statement must be submitted on time and verified by the required company officers or other persons the liquidator requires.

The liquidator must submit a preliminary report to the Court within the prescribed period after receiving the statement of affairs, and may later make further reports if he thinks fit.

The liquidator must act reasonably and efficiently to take control of, protect, realize, and distribute company assets to creditors, and if there are surplus assets left, distribute those as required.

A liquidator may act over property subject to a security interest, but is not required to; and in an expense-causing liquidation task, the liquidator is not required to act without the Director’s consent.

A liquidator must give public notice, notify the Director and Registrar of Companies of appointment, file periodic reports, report suspected offences or misconduct, and mark company documents as being in liquidation.

A company liquidator has broad powers to manage liquidation, including litigation, sales, borrowing, arrangements with creditors, and calling meetings.

A liquidator may require certain people to produce company records, attend, give information, be examined, and help with the liquidation.

A receiver does not have to hand over records or documents needed to carry out the receiver’s functions, but the liquidator may require inspection or copies and must pay the receiver’s reasonable expenses. No person may claim or enforce a lien over company records or documents against the liquidator.

A liquidator must make the document available to the person entitled to it for dealing with or realizing the security interest.

The Court can order compliance, examination, and document production in a winding-up matter on the liquidator’s application, and examined persons must answer questions and sign the written record.

A liquidator may ask the Court to release him, and possibly dissolve the company, after completing specified winding-up steps. The liquidator must file an account, and if the Court orders dissolution the company is dissolved.

This section lets the liquidator call meetings to decide whether a liquidation committee is needed, and requires meetings in some cases. The Court decides on appointing the committee if members want one, and the Rules govern committee proceedings.

After a winding-up order, the Court may settle a list of members and correct the register, and it must collect and apply the company’s assets to pay its liabilities.

In certain winding-up cases, past members may have to contribute to company assets, but there are limits and exceptions.

If a member dies, the member’s personal representatives become liable for the contribution in due course of administration.

If a member goes bankrupt, the trustee in bankruptcy must represent the member in the winding-up and be liable to contribute accordingly.

The Court may order contributories to pay money due to the company and may make or enforce calls and set-off arrangements in winding up.

A liquidator may ask the Court to appoint a special manager. The special manager acts under the Court’s directions, must give security and account as directed, receives Court-fixed remuneration, and may resign on one month’s written notice or be removed by the Court for cause shown.

If someone applies to court to appoint a receiver for the secured creditors of a company being wound up by the court, the court may grant the application.

The Court may set a deadline for creditors to prove their debts or claims.

The Court may order arrest and seizure of a member, officer, former member, or former officer if there is probable cause to believe the person is about to leave Malawi or hide property to avoid payment or examination.

This section lets certain people ask the Court to appoint a liquidator for a foreign company, and lets the Director apply for winding-up of the company’s Malawi assets in specified circumstances.

The Court may, on application by a liquidator, creditor, or shareholder, order related companies in liquidation to pay claims or have their liquidations proceed together.

When deciding whether to make an order under section 137(1)(a), the Court must consider specified group-company factors, and it cannot treat creditor reliance on related-company status as a ground for the order.

Present or former directors or employees of a company in liquidation must tell the liquidator about company property they have or control, and must deliver or otherwise deal with that property as the liquidator directs when required.

A supplier of an essential service must not refuse service to a liquidator or a company in liquidation, or require payment of pre-liquidation charges as a condition of supply.

A company may voluntarily wind up in specified cases, but not if a winding-up application for inability to pay debts is pending without court leave.

During winding-up, the company must stop carrying on business unless the liquidator considers it necessary for a beneficial winding-up. Share transfers after winding-up start are void unless made to or with the liquidator’s sanction.

Directors (or a majority of them) must make a written solvency declaration before winding-up notices are sent, and attach a statement of affairs.

In a voluntary winding-up, the company must appoint a liquidator in general meeting, may set the liquidator’s pay, and can remove or replace the liquidator subject to court control.

If a liquidator thinks the company cannot pay its debts in full, the liquidator must quickly call a creditors’ meeting and present the company’s assets and liabilities. Creditors may appoint another liquidator, and a notice of the meeting must be filed with the Director and sent to the Official Receiver.

If no declaration of solvency is made, directors must arrange and notify a creditors’ meeting for the voluntary winding-up process.

Creditors may nominate a liquidator, and in some cases the Court can decide who acts as liquidator.

Creditors may appoint a liquidation committee, directors may appoint committee members, the court may replace them in some cases, and the committee must meet at least every six months.

After a creditors’ winding-up starts, enforcement steps against a company’s assets are void, and new or ongoing actions against the company need the Court’s leave.

When a company is being wound up, its free assets must be used to pay liabilities pari passu and then distributed to shareholders according to their rights, unless the memorandum and articles say otherwise.

The Court may appoint or replace a liquidator in a voluntary winding-up, and certain acts and property dealings by or with a liquidator remain valid despite defects in appointment or qualification.

A liquidator in a voluntary winding-up may exercise several court-like powers, but must pay the company’s debts and adjust members’ rights among themselves.

The liquidator may arrange a transfer of a company’s business or property to another company if a special resolution sanctions it, and dissenting shareholders may require the liquidator to stop or buy their interest.

If a voluntary winding-up lasts beyond the prescribed period, the liquidator must call meetings at each prescribed period and present an account of the winding-up.

After a company is fully wound up in a voluntary winding-up, the liquidator must prepare an account, call and report to the required meeting, give the required notices, and the company is dissolved after the notice period unless the Court defers the dissolution date.

An arrangement made with creditors during a voluntary winding-up is binding on the company and creditors only if the stated approval conditions are met, and the Court can settle disputes or deal with appeals.

Proper costs, charges, and expenses of a voluntary winding-up must be paid from the company’s assets before other claims.

When a company enters liquidation, the liquidator takes custody and control of the company’s assets, and several shareholder, director, and litigation rights are restricted.

People affected by a liquidator’s act or decision may appeal to court, and liquidators, contributories, creditors, and some officials may ask the court to decide winding-up questions or make orders.

The Official Receiver may exercise committee powers in a liquidation when there is no liquidation committee, including on the liquidator’s application or, if the Official Receiver is the liquidator, in his discretion.

Every liquidator must notify the Director about appointment, office changes, resignation or removal, and send copies to the Registrar and Official Receiver.

A liquidator must pay money received into a special bank account for the company in liquidation and must not put liquidator-derived sums into a private bank account.

Liquidators must file periodic accounts and statements, keep copies available for inspection, notify members and creditors, and may be fined for non-compliance.

If a liquidator fails to fix a required filing or notice default after notice, the Court may order the liquidator to correct it by a specified time.

When a company is being wound up, certain company documents must add the words “in liquidation” after the company name the first time it appears.

This section says certain company books must be kept during winding-up, may be inspected by creditors or contributories unless the Court orders otherwise, and may be destroyed in some winding-up cases. It also lets the Court, on the liquidator’s application, make directors personally liable in some cases, but not if specified reasonable-step or reasonable-belief conditions are met.

A liquidator may invest surplus cash from a winding-up in Government securities or interest-bearing bank deposits, unless the liquidation committee’s written directions or a court order say otherwise.

Liquidators must pay certain unclaimed money to the Official Receiver; the Court can order further steps; claimants may be paid from the Companies Liquidation Account if ownership is satisfied.

A liquidator must not incur winding-up expenses unless there are sufficient available assets, or the Official Receiver expressly directs it. The Official Receiver may direct a particular expense on application by a creditor or member, if the applicant indemnifies the liquidator and, if required, provides security.

A resolution passed at an adjourned meeting of creditors or members is treated as having been passed on the date it was actually passed, not an earlier date, subject to section 146(9).

In a company winding-up, the Court may direct meetings of creditors or members, appoint a chairman, and consider their wishes; a liquidator who calls such a meeting must do so under the Rules.

A company’s liquidation is completed when the liquidator complies with the relevant section for the type of winding-up.

The Court may end or pause a company liquidation if it thinks that is just and equitable.

A creditor cannot keep the benefit of an execution, distress, or attachment against a company’s property unless it was completed before the listed liquidation events, but the court can relax this rule.

The sheriff must transfer company property or money to a liquidator in specified execution cases, retain some proceeds for a prescribed period, and later deduct execution costs and pay the balance to the liquidator if winding-up follows.

A person’s appointment as liquidator is ineffective unless the person has consented in writing, except where the appointment is made by order of the Court. An act done by a liquidator remains valid even if the person is not qualified to act as a liquidator.

This section sets out when a liquidator’s office becomes vacant and how resignation, notice, interim appointment, and replacement work.

The court oversees liquidators, can investigate complaints or misconduct, and can make orders about directions, audits, remuneration, refunds, and records.

The Court may deal with a liquidator’s non-compliance by relieving compliance or ordering compliance; non-liquidators must give five days’ notice before applying, and the Court can also remove or validate a liquidator in specified cases.

The Court must make a prohibition order against a person who is shown to be unfit to act as liquidator, and that person must not act as an insolvency practitioner.

This section defines “failure to comply” for a liquidator as not complying with a relevant duty under an Act or a court order/direction.

A company is presumed unable to pay its debts as they fall due if certain default events occur, unless the contrary is proved and subject to section 183.

A contingent or prospective creditor may apply for liquidation only with the Court’s leave, and the Court may grant leave only if there is a prima facie case.

A statutory demand must relate to a due debt above the prescribed amount, use the prescribed form, be served on the company, and require payment, compromise, or security within the prescribed period unless the Court orders more time.

The Court may set aside a statutory demand if the company applies in time and the Court is satisfied there is a substantial dispute, a qualifying counterclaim/set-off/cross-demand, or other grounds.

During a company winding-up, if business was carried on to defraud creditors or for another fraudulent purpose, the Court may order knowingly involved persons to contribute to the company’s assets.

If a company is in insolvent liquidation, the court may order a current or former director to contribute to the company’s assets, unless the director took every reasonable step to minimize losses to creditors.

This section says when a debtor is adjudicated bankrupt and limits when the Court may make a bankruptcy order.

Certain creditors, trustees, and secured creditors may petition the Court for a bankruptcy order if the listed debt and application conditions are met.

A statutory demand may require the debtor to pay the amount owing (including interest and costs) or give security for it. It must be served in Malawi unless the Court permits service outside Malawi, and it may name an agent for creditor-related steps.

A debtor who receives a statutory demand that overstates the amount owing must still comply, and any dispute about the overstatement must be notified to the creditor in writing within the time stated in the demand.

A debtor is treated as failing to comply with a statutory demand if the stated conditions are met, including service of the demand and no compliance or successful cross-claim response within the time limit.

The Court may stay or adjourn a petition hearing, or refuse to adjudicate a debtor bankrupt, if the stated conditions are met.

If a bankruptcy petition is based on a statutory demand and the debtor has an unresolved appeal against the underlying judgment or order, the Court may stay the petition or refuse it.

The court may stay a creditor’s petition to let the debt dispute be tried, may require security as a condition of the stay, and must hear certain disputes in the Magistrate Court unless it orders otherwise.

The Court may make a bankruptcy order on an unstayed application if there is more than one petition and there is good reason; if it does so, it must dismiss the stayed or adjourned petition.

If a debtor has transferred all or substantially all property to a trustee for creditors, the debtor, the trustee, or any creditor may ask the Court for an order.

The Court may replace the petitioning creditor with another creditor if the first creditor has not acted diligently or gives no evidence, and the debtor owes the other creditor at least the prescribed amount.

A debtor may petition the Court to be adjudicated bankrupt if the debtor cannot pay debts and has combined debts of at least the prescribed amount, but must also file a prescribed statement of affairs; after presentation, the petition cannot be withdrawn without the Court’s leave.

If the section 199 requirements are met, the Court must make a bankruptcy order against the debtor, unless it instead decides to direct the Director to prepare a report; in that case, the Court must adjourn the application.