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I agree with Professor Tettenborn, provided that the "property" was the bankrupt's and vested in the Trustee in Bankruptcy.

(1) When the TIB is appointed, the property of the bankrupt must be passed to the trustee.

(2) Section 306(1) IA 1986 reinforces this position by stating that the "bankrupt's estate shall vest in the trustee immediately on his appointment taking effect..."

(3) Section 306(2) states that "[w]here any property which is, or is to be, comprised in the bankrupt's estate vests in the trustee (whether under this section or under any other provision of this part), it shall so vest without any conveyance, assignment or transfer."

(4) Question: what is the bankrupt's 'property'? There is jurisprudence on the meaning of 'property' within section 306(2), but no case, as far as I am aware (and I am a corporate insolvency specialist rather than a bankruptcy specialist), which would directly cover the point in issue.

(5) Section 283 defines the meaning of "bankrupt's estate" as (a) "all property belonging to or vested in the bankrupt at the commencement of the bankruptcy, and (b) any property which by virtue of any of the following provisions of this Part is comprised in the estate or is treated as falling within the preceding paragraph", subject to section 283(2). Again, we come back to the perennial question, what is property?

(6) One should note that any property held by the bankrupt on trust for any other person is not included within the bankrupt's estate by virtue of section 283(3)(a). Section 283 abolishes the doctrine of reputed ownership.

(7) Section 283 must be read in conjunction with sections 307-9 and section 436 IA 1986.

(8) The latter section is a general definition section where 'property' includes "money, goods, things in action, land and every description of property wherever situated and also obligations and every description of interest, whether present or future or vested or contingent arising out of, or incidental to, property"'. The courts construe the word "property" very generously. It extends to both legal and equitable ownership.

(9) Therefore, to answer conclusively whether section 339 IA 1986 applies, one must determine the extent to which the money misappropriated by Cass was his money/property.

Mark Armstrong-Cerfontaine.

-----Original Message-----
From: Andrew Tettenborn
Sent: 15 December 2000 09:23
Subject: [RDG:] cass's trustee in bankruptcy

Lionel asks what might have happened if Cass's trustee in bankruptcy had tried to recover his losses to the casino as transactions at an undervalue.

I'd have thought the trustee in bankruptcy would fail. Although s.339 doesn't say so in so many words, presumably it can't apply except to property which was the bankrupt's and which would otherwise have gone to the trustee. The money Cass used wasn't and wouldn't.

Any comment from specialist insolvency lawyers?

AT