Insolvency trustee

What it means

An insolvency trustee is a person from the register kept by the Ministry of Justice whom the court appoints when bankruptcy is declared. From that day the estate is handled by the trustee, not by the director.

This is neither a liquidator nor a bailiff. A liquidator closes a company that can still pay everyone, a bailiff enforces for one creditor; the trustee administers the estate for all registered creditors at once.

Their role is different in restructuring: there the company keeps managing its own assets while the trustee supervises, reviews the claims and prepares the plan with it. In the debt relief of an individual through bankruptcy, the trustee realises only the assets the law does not protect, and the remaining debts end once it is over.

How it works in practice

The trustee publishes a notice in the Commercial Bulletin, draws up the inventory of the estate and reviews the claims filed in the bankruptcy. A denied claim must be defended by an action in time, or it is paid nothing.

The creditors’ meeting elects the creditors’ committee, which gives the trustee binding instructions on realising assets. The books close as of the day before the declaration and extraordinary financial statements are drawn up.

Once bankruptcy is declared, the trustee also takes over the debtor’s books. Where our office kept them, we hand over the complete records, access to the accounting software and a list of filings in progress; former managing directors are also obliged to cooperate with the trustee.

What to watch out for

A creditor who misses the filing deadline gets nothing from the estate and loses the tax side too: both the impairment allowance and the write-off are deductible only where the claim was properly filed, so the whole loss stays with the company.

The trustee also reviews acts from before the bankruptcy: sales of assets below value, payments to close persons, preference given to some creditors. Such acts can be challenged, and whoever received the benefit must return it to the estate; where breached duties come to light, the trustee also pursues the managing director’s liability.