“banner728.gif"

Maureen challenges Finance Bank bankruptcy application against her

FORMER first lady Maureen Mwanawasa has argued that allowing Finance Bank Zambia limited to commence bankruptcy proceedings against her will not be in the interest of justice as there is a likelihood that it will recover its K6 million debt without following bankruptcy proceedings.

She said the application for an order for sale of her properties by the bank was pending hearing before High Court judge Pixie Yangailo.

Finance Bank asked the Lusaka High Court to issue a bankruptcy notice against Maureen for failing to honour a loan facility she obtained in 2013.

Maureen defaulted to pay amounts due to the bank under a consent judgment dated June 11, 2019 in a matter where she was sued together with her farm for non-payment of a loan facility.

According to the consent judgment, it was agreed that Maureen would pay the bank K6,754,546. 76 in settlement of the Bank’s claim against Mipachima Farms limited and the former first lady.

It was agreed that the said sum and accrued interest would be paid before June 30, 2019.

Mipachima Farms was supposed to pay the bank K892,831.99 before the said date.

The parties agreed that if Maureen and her farm defaulted on payment of the judgment sums, they would be liable to pay interest on the total sums due to the bank at contractual interest rates which would stand payable on the judgment sum.

It was further agreed that if the defendants failed to pay the judgment sums on the due date, the bank shall be at liberty to levy execution against Maureen and her farm at the date of such default without need for any further order of court.

But in an affidavit in opposition to the bankratcy notice, Maureen said that the said consent order dated June 11, 2019 under cause no. 2018/HP/1790 was executed by the Bank by way of an application for a charging order over her properties L/18414/M and L/19290/M situated in Kazungula.

She said upon obtaining a charging order on February 23, 2021, Finance Bank commenced an action in the High Count under cause no. 2021/HP/0249 for an order for sale of the charged properties.

“The sale of the charged properties if successful is meant to satisfy the debts that the applicant seeks to rely on to commence bankruptcy proceedings against the respondent,” Maureen said.

“Allowing the applicant to commence bankruptcy proceedings when the hearing of the application for an order for sale of charged properties is pending will not be in the interest of justice as there is a likelihood for the applicant to recover the debts without resorting to the proposed bankruptcy proceedings.”

She said the Bank had deliberately neglected to inform the court that the hearing of its application for sale of her properties was pending and scheduled for hearing on September 14 before justice Yangailo.

“This act by the applicant has the potential of misleading this court to believe that the bankruptcy proceedings are necessary when in fact not as the applicant has already taken active steps to recover the debt by commencing proceedings for an order for sale of charged properties,” Maureen stated.

“I crave the indulgence of this court not to grant the applicant the order being sought as it will allow the applicant to be unjustly enriched if execution in both applications is successful.”

Maureen said if the properties were not enough to service the debts, the Bank would not at that stage be prevented from pursuing its debt by way of bankruptcy proceedings but at this stage, it had failed to sufficiently prove that the bankruptcy proceedings were necessary.

“That the applicant is introducing duplicity and multiplicity of actions by the proceedings herein as there are active proceedings before this court,” said Maureen.

Leave a Reply

Your email address will not be published. Required fields are marked *