A bankruptcy trustee is appointed by the Department of Justice to represent the estate of the debtor in bankruptcy proceedings. The obligation of bankruptcy trustees is to both the debtor and creditors, and as such, they must make recommendations, evaluations, and decisions in the best interest of all parties in accordance with the U.S. Bankruptcy Code. While a bankruptcy trustee cannot act without the approval of the bankruptcy court, they have a great deal of responsibility, both legally and ethically.
Oftentimes, a trustee will hire legal counsel to represent them as they administer these complicated estates. Hiring an experienced bankruptcy law firm with experience in trustee representation to represent you as a bankruptcy trustee can provide a trusted source of legal guidance in any bankruptcy case.
Bankruptcy Trustee Responsibilities
With over 750,000 bankruptcies filed in 2018, having an experienced bankruptcy attorney to represent a bankruptcy trustee can be beneficial in any bankruptcy case.
A Chapter 7 trustee will organize and manage the assets and then determine the distribution of asset proceeds to creditors. This bankruptcy, also known as straight or liquidation bankruptcy, will utilize the trustee to control and manage the entire process of asset liquidation and distribution.
- A Chapter 11 trustee will help create a reorganization plan for corporations. An appointed trustee will create a restructuring of debt that is fair to the debtor’s estate and creditors.
- A Chapter 13 trustee is appointed for individual bankruptcies that are looking to restructure their debt. A trustee will assist in the creation of a reorganization plan that is fair to the individual debtor’s estate and creditors.
Receivership is a legal process through which a trustee assumes management of a business’s assets to avoid total liquidation of business assets, typically by restructuring the company. In this scenario, the receiver—or trustee—takes over all major decision-making power relating to the business assets.
As a bankruptcy trustee, a great deal of obligation rests on your shoulders. You have a fiduciary duty to both the debtors and the creditors, and a responsibility to ensure all decisions are both legal and ethical. Many decisions can expose a bankruptcy trustee to legal liability.
Hiring a trustee representative can protect you from legal liability throughout the bankruptcy case administration. From recovery of the bankruptcy assets to management and liquidation, a trustee representative can guide a bankruptcy trustee to make legally correct and ethically responsible choices.
Complex bankruptcies may require handling objections to exemptions, relief from stay, and responding to challenging legal motions. Having a trusted representative by your side to help you make appropriate legal choices can ensure protection from legal liability. Additionally, hiring a trustee representative will provide assistance regarding claims review, investigations, litigation actions, inquiries regarding the financial status of the debtor, and more.
We represent bankruptcy trustees as they fulfill their legal responsibilities. Providing bankruptcy trustees with legal advice regarding powers and duties under the Bankruptcy Code ensures that the finances of the debtor and the claims of the creditors are all investigated, managed, and distributed correctly.
The experienced bankruptcy attorneys at Goe Forsythe & Hodges LLP have advised trustees on every area of their responsibilities as a bankruptcy trustee. Our legal team has years of experience regarding trustee representation. To schedule a meeting, please contact Goe Forsythe & Hodges LLP at 949.798.2460 or via email today for a consultation.
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