At the moment when a legal entity or individual is assessed as bankrupt by an arbitration court, a certain procedure may be initiated necessary to repay debts to creditors. This process is called competitive. This is a production that requires a certain order and the execution of various actions by specially designated persons, which is prescribed by the legislator in regulatory legal acts. And one of the main participants in the bankruptcy case is a bankruptcy trustee endowed with specific rights and obligations.
Bankruptcy proceedings
In order to understand who the bankruptcy trustee is (KU), you need to know what the bankruptcy proceedings are and some features of its opening.
In general, when considering a case of insolvency of a legal entity, such actions as observation, external management, rehabilitation, bankruptcy proceedings or settlement are applied. In the event of bankruptcy of an individual, only the last two indicated stages are used.
During the insolvency proceedings, executives called arbitration managers are established.
These are specially trained and performing certain actions at the time of the bankruptcy of the facility people who are members of a self-regulatory organization of arbitration managers. Depending on the stage of the insolvency process, they can be external, temporary, administrative, etc. So, at the time of the bankruptcy proceedings the bankruptcy trustee is appointed, the concept, functions, rights and obligations of which are fixed in the relevant Federal Law and are described further in the article.
Bankruptcy proceedings themselves are a process that begins after a debtor is declared bankrupt by an arbitration court. At the time of this kind of procedure, actions are taken to search and collect all the debtor's property, appropriate payments are made to all creditors, and the enterprise itself is liquidated.
According to the legislation of the Russian Federation, the term for bankruptcy proceedings is up to six months, but it can be longer (up to one year) if the person involved in the case filed a petition.
In Russia, the consideration of bankruptcy cases, all their specifics are generally enshrined in the Federal Law "On Insolvency (Bankruptcy)", as well as in particular bankruptcy proceedings. The bankruptcy trustee in this process plays an important role, as it is the main manager of all the property of the debtor. Therefore, the regulation of its activities, the definition and consolidation of duties and rights is extremely important.
Concept of bankruptcy trustee
This is the person appointed by the arbitration court at the time the person was declared insolvent (bankrupt) and the bankruptcy proceedings were established. He is the head of the insolvent facility and its management bodies, as well as the owner of the debtor's property, if such is a unitary enterprise.
In order to appoint a bankruptcy trustee, the court shall issue an appropriate ruling, which may be appealed. KU action ends at the time of termination of this bankruptcy proceedings.
Rights
The powers and obligations of KU are enshrined in article 129 of the Federal Law "On Insolvency". In accordance with this article, the rights of the bankruptcy trustee include:
- Disposal of property of the debtor in the manner established by the Federal Law.
- The possibility of dismissal of employees, managers of the debtor in accordance with the terms of the Federal Law.
- Filing an application for refusal to perform contracts or other transactions, as defined in Article 102 of this Federal Law. Except when there are circumstances hindering the restoration of solvency of a bankrupt person.
- Filing an application on behalf of the debtor to the arbitration court on the recognition of invalid contracts and transactions as null and void - the consequences resulting from these decisions on recovering losses incurred as a result of actions (inaction) of the insolvent leader (board of directors, collegial executive body or any other governing body) object.
Responsibilities
The obligations of the bankruptcy trustee shall be fulfilled from the moment of his appointment until the termination of the bankruptcy proceedings or until the date of adoption of the settlement agreement or the day of removal of the trust. They include:
- Taking over the debtor’s property, taking an inventory in connection with this.
- Entering data into the Unified Federal Register of bankruptcy information, as well as information received during the inventory of the debtor's property, within 3 business days from the date of its completion.
- Taking measures to ensure the safety of material assets of an object recognized as bankrupt.
- Attraction of an appraiser of property of the debtor, if required by law.
- The performance of actions aimed at the search and return of property of a bankrupt person, which is held by third parties.
- Warning workers about dismissal no later than a month after the establishment of bankruptcy proceedings.
- Maintaining a register of creditors' claims.
- Submission of claims for debt collection against persons who have obligations to the bankrupt object.
- Safety documentation of the debtor and its transfer to the appropriate authorities if necessary.
- The statement of objections regarding the advanced claims of creditors in the manner prescribed by law.
- The conclusion of transactions that will be beneficial to the debtor (only with the permission of the meeting or committee of creditors).
If the meeting of creditors makes a decision to terminate the activities of the debtor enterprise, the bankruptcy trustee shall do this within three months from the date of this decision. That is, he is obliged to stop the release of goods, the provision of services or the performance of work by this organization. A verdict on the termination of a company’s work cannot be issued in cases where it entails a man-made or environmental disaster, paralyzes the work of preschool, medical, educational institutions, communal structures or any other objects necessary to ensure the livelihoods of people.
Bankruptcy Manager Report
After the settlements with all creditors are completed or the bankruptcy proceedings are terminated for the reasons specified in Article 57 of the Federal Law, the KU must provide a report on the work done and the results of this procedure to the arbitration court.
The bankruptcy trustee report is a list of documents confirming:
- sale of debtor's property;
- repayment of credit obligations;
- submission to the Pension Fund (its territorial division) of information on the date, place of birth of the debtor, his citizenship and passport data, including the full name, gender and address of the permanent registration of the bankrupt person, as well as information that must be recorded in this body in accordance with paragraph 2 of Article 11 -th Federal Law "On individual accounting in the system of compulsory pension insurance" (insurance number of an individual personal account, information about places and periods of work, etc.).
In addition to the aforementioned documents, the bankruptcy trustee register of claims must be attached to the report, which will indicate the amount of the debts of the bankrupt person paid.
After KU has prepared and submitted its report to the competent authority, it is obliged to notify creditors of this fact.
KU activity control
Monitoring the activities of the manager is carried out in accordance with Article 143 Federal Law "On Bankruptcy". According to this law, creditors (meeting or committee) receive all the necessary information for this at least every three months, unless otherwise specified at the meeting of creditors.
Information provided for control may be in the form of reports or any separate documents showing the state of affairs during the competition or at its completion.
The KU report should contain information:
- on an inventory of the property of the debtor, its assessment, if any;
- on the amount of funds that were credited to the debtor’s bank account and the sources of such financing;
- the process of selling the property of a bankrupt entity, an indication of the amounts received;
- on the size and number of claims for debt collection that are put forward to third parties;
- the number of people working for the debtor who continue to work after the opening of the competition, and the number of employees dismissed (retired);
- about the work that was done to ensure that the transactions were declared invalid, in the interests of the debtor;
- on compiling and maintaining a register of creditors' claims, with information on what their total amount and size are separately in each queue;
- on those measures that were taken to preserve the property of the bankrupt object and to recover the property that it belongs to, but for some reason is held by third parties;
- about the amount of current debt, with a description of the reasons for its formation;
- on the work performed by KU to close the accounts of the debtor;
- on bringing to liability of persons liable in connection with bringing the debtor to bankruptcy;
- all other information, the content of which is established by KU, creditors or arbitration court.
All data relating to bankruptcy proceedings, for example, what are the costs of the bankruptcy trustee to conduct the relevant process, the bankruptcy trustee must provide at any time at the request of the arbitration court.
KU release
The bankruptcy trustee may be released or suspended from the performance of his duties in accordance with Articles 144 and 145 of the Federal Law.
So, KU is exempted from the exercise of its functions by the arbitral tribunal in the event of:
- own desire, on a personal statement;
- filed by the self-regulatory organization of arbitration managers (of which KU is a member) of the corresponding petition to the arbitration court.
In the second case, a petition is filed when facts of a violation in the activity of the bankruptcy trustee, his discrepancy with his position, incompetence, and unfair work are revealed. In this case, the decision is initially made by the collegial management body of the self-regulatory organization of arbitration managers, and then within 14 business days from the date of its adoption, the petition is submitted to the arbitration court.
KU removal
The removal of the manager may be carried out if:
- a petition has been filed from the meeting or committee of creditors in a situation where the KU does not fulfill its duties or performs them improperly;
- any person participating in the bankruptcy case and whose interests were violated as a result of the bankruptcy trustee's activities, as well as in connection with this the debtor or creditors suffered or could suffer losses, lodges a complaint with the arbitration court, and this claim is satisfied;
- identified circumstances that do not allow KU to be appointed to this position;
- the bankruptcy trustee violated the terms of membership in a self-regulatory organization of arbitration managers and was expelled from it or forcibly left the company for violating the law;
- administrative punishment is applied to KU in the form of deprivation of his right to engage in this activity.
Upon removal or release, a new bankruptcy trustee shall be appointed. This happens in accordance with the procedure established by federal law. If such a decision is made, then it must be implemented immediately, although it can be appealed.
Summing up, it should be noted that bankruptcy proceedings are opened by the court only in cases where other bankruptcy proceedings have not brought any result or there is no possibility to restore the solvency of the object.
At these stages, as a rule, the bankrupt object has a lot of outstanding debt obligations and, in connection with this, a lot of unsatisfied creditors. It is at such moments that bankruptcy proceedings begin. This indicates that the bankruptcy trustee is a person who performs a specific role in this process, about its significance and the need for insolvency proceedings.