Role of Trustee in Bankruptcy - Explained
What does the Bankruptcy Trustee Do?
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What is the authority of the trustee (debtor in possession) in bankruptcy?
As previously discussed, the trustee in bankruptcy plays an important role in the administration of a bankruptcy case. The general authority of the trustee includes:
- affirming or disaffirm contracts with the debtor which are yet to be performed;
- setting aside fraudulent conveyances from the bankruptcy estate;
- voiding certain preferential transfers of property by the debtor to creditors;
- suing those who owe the debtor an obligation that is not paid; and
- setting aside statutory liens on property taking effect upon the filing of bankruptcy.
Remember, the trustee in bankruptcy plays a primary role in all individual bankruptcies and business liquidation bankruptcies. Trustees are only appointed in business reorganizations in limited circumstances. It is the responsibility of the DIP to administer the bankruptcy estate. The authority of the DIP is discussed separately.
Next Article: Assets Included in Bankruptcy Estate Back to: BANKRUPTCY LAW
What do you think about the authority of the bankruptcy trustee? Why do you think the trustees authority is so broad?
ABC Corp is in the process of a liquidation bankruptcy. A bankruptcy trustee has been appointed to control ABCs bankruptcy estate. What are the powers of the trustee in settling the debts and obligations of the estate?
- Bankruptcy Law (Intro)
- What is Bankruptcy?
- Insolvency - Definition
- What are the types of business bankruptcy?
- Chapter 9 Bankruptcy
- Chapter 12 Bankruptcy
- Chapter 15 Bankruptcy
- Who are the participants in the bankruptcy process?
- Key concepts behind the bankruptcy process?
- Absolute Priority Rule
- Pari Passu
- What rules govern the bankruptcy process?
- Bankruptcy Abuse Prevention and Consumer Protection Act
- American Bankruptcy Institute Definition
- What the authority of the bankruptcy court?
- What is the authority of the trustee (debtor in possession) in bankruptcy?
- Debtor in Possession
- What assets of the debtor are included in the bankruptcy estate?
- Bulk Sales Law
- What is the automatic stay in bankruptcy?
- What is a claim by creditors of the bankruptcy estate?
- What is voluntary and involuntary bankruptcy?
- What is the Chapter 7 bankruptcy process?
- What is the Chapter 11 bankruptcy process?
- How to File Bankruptcy for a Business
- Accept or reject contracts?
- Avoiding powers?
- Stay of Proceeding?
- Use of Business Assets?
- Post-Petition Financing?
- Bankruptcy Financing - Definition
- What is the appointment of a Trustee or Examiner in business bankruptcies?
- What is a Plan of Reorganization?
- Reorganization - Definition
- Subordinated Debt
- Preferred Debt
- What is Cramdown of a reorganization plan?
- To what extent does the bankruptcy process relieve a debtor's debts?