Trustee Bankruptcy, What Does It Mean
A bankruptcy trustee is an individual appointed by the bankruptcy court to ensure the smooth operations of the bankruptcy affairs. They are responsible for liquidating assets of the debtor, ensuring that the creditors are repaid accordingly. In the bankrupt file under chapter 11, the bankruptcy trustee is required to ensure that the business remains in operation.
Trustees take on different roles depending on the chapter that is filed. Under Chapter 7 of bankruptcy, the trustee plays a minimal role. This is because under this chapter the debtor usually has no assets. If the debtor has assets, they are required to liquidate and allocate the proceeds to the creditors accordingly. They are required to check the bankruptcy, ensure that the debtor is following the court orders and looks at the schedules. They are also required to supervise the process of selling assets. The trustee also has the authority to deny the debtor a discharge if there is proof of fraud, perjury or ineligibility.
Under a chapter 13 bankruptcy, the role of the trustee is more involving. They are responsible for the financial affairs of the debtor. This has to be in such a way that what is owed is paid to the creditors. They are required to be present at all hearings that are concerned with the valuing of the assets. They must also ensure that they have received payments from the debtor and also distribution of the funds to the various creditors.
The roles of a trustee under Chapter 11 are to set up an official committee that will serve in the case ad also to review the restructuring plans of the case and ensure that the information is truthful and correct. They are also supposed to make sure that deadlines are met. If there is a hint of fraud they investigate and refer the case to the appropriate department.
