Assets of a bankrupt which have been acquired by a third party may still be after-acquired property. If such assets were beneficially owned by the bankrupt, they would in such case have become vested in the trustee in bankruptcy.

Play

Not only do a trustee in bankruptcy's investigatory role and powers relate to assets which were acquired before the commencement of bankruptcy proceedings; but, in fact, the bankrupt's affairs after the Trustee is appointed may show that certain property was acquired after the date of commencement but before discharge, and therefore may constitute 'after-acquired property'.

It may, in fact, be possible in some cases for a trustee in bankruptcy to urgently seek and obtain a freezing injunction against such a third party, if after-acquired property is discovered. If successful, this would have had the effect of preventing irrecoverable loss to the bankruptcy estate, as long as the relevant notice under section 307 of the Insolvency Act 1986 has been served upon the bankrupt within 42 days of the date when the fact that certain after-acquired property had been acquired by, or devolved upon, the bankrupt had first come to the Trustee's knowledge.

Service of such a notice would validate the trustee in bankruptcy's claim to the after-acquired property.