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Liquidation: admission and rejection of proofs

The liquidator must settle a list of creditors. He fixes a date before which the creditors must prove debts. This must be advertised to every creditor mentioned in the statement of affairs. Debts must be proved by affidavit and securities must be stated. It may be necessary to produce vouchers, i.e. invoices, etc. trade discounts must be deducted but no cash discounts over 5 per cent. Future debts may be proved and must be discounted at 5 percent; wages may be proved en bloc. The liquidator must examine all proofs and admit or reject with reasons within twenty-eight days. The creditor can object to rejection within a further twenty-one days by application to the court. On the first of each month, the liquidator files a list of proofs received during the previous month, indicating whether they have been accepted or rejected.

Reference: The Penguin Business Dictionary , 3rd edt.