The legitimacy as a proper party transferred to the bankrupt's estate, the capacity to litigate in the name and on behalf of the debtor, may, however, be transferred back to the debtor if he opposes the settlement made in the disputed case. However, the debtor may obtain the right to proceed in his own name only if he provides the bankrupt's estate a collateral security on what is offered as the settlement. Thus the debtor must provide the bankrupt's estate with a collateral corresponding to the sum which the bankrupt's estate would get if it made a settlement in the dispute. If the debtor has not given this collateral in the meeting in which the creditors have decided upon the settlement of the case, the debtor has lost his chance to regain his legitimacy as a proper party, and the creditors in the bankruptcy can settle the dispute with final order in a manner that is binding on the debtor. Section 71 subsection 5 of the Bankruptcy Act contains an explicit provision to this effect. This is a peremptory legal provision and cannot otherwise be agreed upon."

The factual position is that on the 10th September 1997 there was a creditors meeting in Finland at which all relevant parties, including Mr. Holmaranta and his lawyer were present. The creditors approved of the Trustees in bankruptcy negotiating a settlement of the Manx claim by payment from Mr. Lindroos of US$ 70,000, or such lesser sum as might be agreed. This latter phrase has been in some dispute because Mr. Conti did produce a copy of Minutes which did not include it. However, Mr. Caine has pointed out that in Minutes of January 1998 before the Chief Inspector of bankruptcy, the words did appear and it has been confirmed by the witness, Mr. Leisvuori, that at the creditors meeting on 10th September authority was given for settlement at the rate of US$ 70,000 or for an inferior amount. Mr. Leisvuori, in his evidence, confirmed that on 15th October 1997 he and his co-Trustee reached an agreement with Mr. Lindroos whereby by payment of a sum of 10,000 US dollars, made to the Trustees in bankruptcy, they would abandon the Manx proceedings thus leaving Mr. Lindroos free to claim the shares in Regatta Trading. A copy of the Agreement of 15th October 1997 is in the Court bundle in divider 2. It reads as follows:-