Court declares businessman bankrupt over millions owed to friends, shylocks – Business Daily
The High Court has granted a businessman’s wish to be declared bankrupt after proving that he cannot repay his debts running into millions of shillings.
Mr Madhav Moolraj who ran a food catering business known as Horse Shoe Tavern Limited told the court that he feared being sent to jail because he has no prospects or repaying close to Sh60 million owed to friends, business associates, shylocks, forex bureaus and banks.
The businessman whose business closed up in March 2020 said some of the creditors might seek to recover the debt and his inability to repay might see him imprisoned.
Justice Abigael Mshila allowed his application and adjudged him to be bankrupt. “An Interim Order of stay is hereby granted against any action, execution or other legal process against the property or person of the debtor,” the judge said.
He directed the case to be mentioned in October 6.
Under Section 304 of the Insolvency Act, a debtor can seek interim orders to allow the debtor make a proposal, which provides for a person to act as supervisor of the voluntary arrangement.
The proceedings are meant to protect genuine people who have unfortunately found themselves in debt until they recover.
In Mr Moolraj’s case, he proposed Mark Gakuru as the official receiver and paid Sh30,000 for his expenses.
In an affidavit filed in court, the business said his bank statement showed that he had Sh188,536 in cash, yet the debt stood at Sh59,589,531.
He told the court that the debt included an overdraft borrowed from Prime Bank. He said the account had a balance of Sh73,749, while another account had a balance of Sh88.
A third bank account at Mayfair Bank Ltd had a balance of Sh1,935.
“The Petitioner having been filed in good faith and supported by evidence, the Court finds no reason to deny the order of bankruptcy against the Petitioner,” the judge said.