Bankruptcy notices and pseudonyms

Can a bankruptcy notice (BN) use pseudonyms? Yes, according to a Federal Court case handed down on Thursday.

Imagine, you receive a notice of an application to make you a bankrupt and all the notice says is:

– your name is LF DB

– the creditors name is Ms S M

– you owe $6.55 million as a result of a final judgment in Court

According to the Federal Court, the BN was valid because:

  1. The BN complied with the suppression of name orders from the Court.
  2.  Even though it is a fundamental tenant of bankruptcy that the public know the identify of a bankrupt, this is not an issue at the time of the issue of the bankruptcy notice. Instead, the BN is between the creditor and the debtor.
  3. Only once the BN expires and a sequestration order is sought, may this become an issue.
  4. LFDB could not be misled about the identity of MSSM, as the parties had been engaged in a significant amount of Australian and NZ litigation over many years.
  5. Therefore, the way the creditor was named in the bankruptcy notice does not raise issues of public policy.

Not sure I agree with this case, but at least it seems the Court has taken a pragmatic approach, which I always favour.

What do you think, are pseudonyms enough or are they too ambiguous?

#SVVoidables

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