Section 105Part 16 — Distribution of Property of Debtor
Onerous and unprofitable property of debtor; power of Trustee to disclaim same; effect of disclaimer
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Where any part of the property of the debtor consists of land of any tenure burdened with onerous covenants, of unmarketable shares in companies of unprofitable contracts or of any other property that is unsaleable, or not readily saleable, by reason of its binding the possessor thereof to the performance of any onerous act, or to the payment of any sum of money, the Trustee, notwithstanding that the Trustee has endeavoured to sell, has taken possession of such property or exercised any act of ownership in relation thereto, may, in writing under the Trustee’s hand, disclaim such property, and upon the execution of such disclaimer the property disclaimed shall, if the same is a contract be deemed to have determined at the date of the filing of the bankruptcy petition so far as regards the interest of the debtor therein, and the liability of the debtor and property and of the Trustee thereunder and if the same is a lease to have determined at the same date, so far as regards the interests of the debtor therein and the liability of the debtor and the debtor’s property and the Trustee to the performance of the covenants and the conditions thereof, and if the same are shares in any company to have been forfeited at the same date; and whatever is the nature of the property it shall (unless the Court otherwise orders) pass to the person, if any, entitled thereto on the determination of the estate or interest of the debtor therein, and in no case shall any estate, interest or liability therein or thereunder remain in the debtor.
Such disclaimer shall not prejudice the rights or remedies or affect the obligations of any person other than the debtor and the Trustee, and the Court may, on application made by any person claiming any interest in the disclaimed property, and upon hearing such persons as it thinks fit, make an order for the vesting of the same property in or delivery thereof (together with any deeds or documents relating thereto) to any person or persons entitled thereto, or a trustee for that person or them, and upon such terms as the Court may think just, and upon any such vesting order being made the property comprised therein shall vest according to the tenor thereof in the person or persons therein named in that behalf without any conveyance or assignment for the purpose.
Any person injured by the operation of any such disclaimer as aforesaid shall be deemed to be a creditor of the debtor to the extent of such injury and may accordingly prove the same as a debt under the bankruptcy petition.