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Appointment and role of the trustee in bankruptcy

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The purpose of the trustee in bankruptcy is to obtain, realise and distribute all available assets in the bankrupt’s estate in accordance with the law. Supported by the various provisions in the Insolvency Act 1986, the trustee is entitled to exercise their own judgement when carrying out their function and during the management of the bankrupt’s estate.

Appointment of trustee in bankruptcy

A trustee in bankruptcy, who must be a licenced Insolvency Practitioner, can be appointed in one of the following ways:

  • By way of meeting between the bankrupt’s creditors. The Official Receiver must decide within 12 weeks of the bankruptcy order whether to summon a meeting of creditors. Notice of not less than 14 days must be given to every creditor known to the Official Receiver and the court must be notified. If the Official Receiver decides against calling a meeting, creditors holding not less than 25% of the debts in value can require him or her to do so, subject to paying a deposit to cover the cost of the meeting. Once convened, the meeting can appoint a trustee, a creditors committee and settle the basis of the trustee’s remuneration.
  • By the Secretary of State. This can occur where there is a creditor holding the vast majority of the debt and wants a specific Insolvency Practitioner.
  • By the court. This may occur when bankruptcy arises following the failure of an Individual Voluntary Arrangement (IVA) and the IVA supervisor is appointed trustee or where the court appoints the Insolvency Practitioner.

The purpose of the trustee in bankruptcy is to obtain, realise and distribute all available assets in the bankrupt’s estate in accordance with the law. Supported by the various provisions in the Insolvency Act 1986, the trustee is entitled to exercise their own judgement when carrying out their function and during the management of the bankrupt’s estate.

In order to do this effectively, the trustee will usually investigate the bankrupt’s affairs with a view to ensuring creditors receive the returns that are properly due to them. This duty to investigate includes looking at the circumstances of transactions that occurred before the bankruptcy to see whether any of these transactions are open to challenge and might be set aside or otherwise adjusted for the benefit of the creditors.

These transactions include:

  • Any transactions at an undervalue;
  • Preferential treatment of creditors;
  • Excessive pension contributions;
  • Extortionate credit bargains;
  • Assignment of book debts; and
  • Transactions defrauding creditors.

For more information on the above mentioned transactions please visit our Antecedant transactions page.

The Trustee’s powers

The trustee has a wide range of powers including:

  • To carry on the business of the bankrupt for the purpose of winding it up for the benefit of the unsecured creditors;
  • To bring or defend legal proceedings in relation to any claim by or against the bankrupt;
  • To apply to the court for possession and sale of the bankrupt’s home; and
  • To apply to the court to sell or otherwise deal with property or assets belonging to the bankrupt.

Some of the trustees’ powers can only be exercised with the sanction of the Secretary of State or, if there is one, the Creditors Committee. The Creditors Committee oversees the administration of the bankruptcy and it can give approval for certain actions which would otherwise require the permission of the court.

Any act, omission or decision of the trustee is open to challenge by the bankrupt or any creditor. The court may confirm, reverse or modify the situation or give directions as to what steps should be taken to resolve the situation.

Duties and responsibilities of the trustee:

  • To advertise their appointment. The trustee must give public notice of their appointment in the London Gazette and in such other manner as the trustee thinks fit.
  • To assist the Official Receiver. The trustee is under a duty to provide the Official Receiver with such information as may reasonably be required from time to time.
  • To realise any assets belonging to the bankrupt for the benefit of creditors;
  • To report to the Financial Conduct Authority. Where the bankrupt was regulated by the FCA, there is a duty on the trustee to report any misconduct on the part of the bankrupt.
  • To use the Insolvency Service Account. The trustee is required to pay all sums received over £5,000 into the government’s account. An ‘ad valorem duty’ is deducted from monies paid into this account, which reduces the amount available to creditors.
  • To keep records. A trustee is required to keep separate accounts for each bankrupt.
  • To investigate. The requirement to get in the assets for the benefit of the creditors normally leads to an investigation of one kind or another.

If the bankrupt or the creditors are dissatisfied with any aspect of the trustee’s conduct of the bankruptcy, an application can be made to the court. However, the court will not intervene as a matter of course and they would need to evidence that the trustee was acting unreasonably before the court will interfere with the trustee’s discretion. The trustee can ask the court for directions in any situation where he or she is unsure as to the best course to take.

The appointment of a trustee in bankruptcy and the performance of this role may have a significant bearing on the outcome of the bankruptcy. Our solicitors are able to provide advice on the many issues that can arise in this area. For more information, please email litigation@grantsaw.co.uk or contact our insolvency experts on 020 8858 6971.

Meet the Appointment and role of the trustee in bankruptcy team
Ray Crudgington
Managing Partner
greenwich
02083054224
ray.crudgington@grantsaw.co.uk
Maria Lati
Partner
Head of Residential Property
blackheath
02083054229
maria.lati@grantsaw.co.uk
Mike Clary
Partner
Head of Family
greenwich
02083054237
mike.clary@grantsaw.co.uk
Kalpa Prajapati
Partner
Head of Private Client
blackheath
02083053536
kalpa.prajapati@grantsaw.co.uk
Mario Savvides
Partner
Head of Commercial Property
greenwich
02083053531
mario.savvides@grantsaw.co.uk
Sarah-Kate Jackson
Partner
Head of Litigation
greenwich
02083054236
sarah-kate.jackson@grantsaw.co.uk
Adina-Leigh Collins
Litigation
Solicitor
greenwich
02083053556
adina-leigh.collins@grantsaw.co.uk
Aimal Gram
Commercial Property
Solicitor
greenwich
02083053524
aimal.gram@grantsaw.co.uk
Aisha Mohammed
Residential Property
Solicitor
greenwich
02083054228
aisha.mohammed@grantsaw.co.uk
Aishat Balogun
Aishat Balogun
Family
Solicitor
greenwich
02083054214
aishat.balogun@grantsaw.co.uk
An Le Tran
Commercial Property
Professional Support Solicitor
greenwich
02083054226
anle.tran@grantsaw.co.uk
Angus Young
Litigation
Solicitor
greenwich
02083054225
angus.young@grantsaw.co.uk
Atifha Aftab
Atifha Aftab
Family
Solicitor
greenwich
02083054238
atifha.aftab@grantsaw.co.uk
Bimal Kotecha
Litigation
Solicitor
greenwich
02083053523
bimal.kotecha@grantsaw.co.uk
Charlotte Warren
Charlotte Warren
Private Client
Solicitor
blackheath
02083054231
charlotte.warren@grantsaw.co.uk
Claire Mac Mahon
Litigation
Solicitor
greenwich
02083053537
claire.macmahon@grantsaw.co.uk
Deborah Taite
Residential Property
Solicitor
blackheath
02083053542
deborah.taite@grantsaw.co.uk
Emily Pearce
Residential Property
Solicitor
greenwich
02083053526
emily.pearce@grantsaw.co.uk
Georgia Beales
Litigation
Paralegal
greenwich
02083054206
georgia.beales@grantsaw.co.uk
James McKimm
James McKimm
Corporate and Commercial
Solicitor
greenwich
02083054217
james.mckimm@grantsaw.co.uk
Jeremy Brooks
Jeremy Brooks
Private Client
Solicitor
blackheath
02083053534
jeremy.brooks@grantsaw.co.uk
Joanna Godden
Notary Public
Notary
greenwich
02083083535
joanna.godden@grantsaw.co.uk
Kim Whitaker
Kim Whitaker
Corporate and Commercial
Head of Corporate and Commercial
greenwich
02083053539
kim.whitaker@grantsaw.co.uk
Lauren Smith
Employment and Family
Paralegal
greenwich
02083053543
lauren.smith@grantsaw.co.uk
Maleeha Iqbal
Residential Property
Licensed Conveyancer
greenwich
02083054232
maleeha.iqbal@grantsaw.co.uk
Mandeep Clair
Family
Solicitor
greenwich
02083054235
mandeep.clair@grantsaw.co.uk
Michael Pope
Employment
Consultant Solicitor
greenwich
02083053540
michael.pope@grantsaw.co.uk
Michelle Pinnington
Michelle Pinnington
Residential Property
Solicitor
greenwich
02083054216
michelle.pinnington@grantsaw.co.uk
Noella Gooden
Employment
Solicitor (Australian qualified)
greenwich
02083053543
noella.gooden@grantsaw.co.uk
Raj Waghela
Raj Waghela
Residential Property
Solicitor
greenwich
02083053529
raj.waghela@grantsaw.co.uk
Randeep Thethy
Randeep Thethy
Residential Property
Solicitor
greenwich
02083054209
randeep.thethy@grantsaw.co.uk
Sarah Conner
Sarah Conner
Private Client
Solicitor
blackheath
02083054234
sarah.conner@grantsaw.co.uk
Simona Morina
Litigation
Solicitor
greenwich
02083053521
simona.morina@grantsaw.co.uk
Simran Lalli
Simran Lalli
Employment
Solicitor
greenwich
02083054208
simran.lalli@grantsaw.co.uk
Susan Collins
Commercial Property
Solicitor
greenwich
02083054200
susan.collins@grantsaw.co.uk
Tatiana Zenina
Tatiana Zenina
Private Client
Solicitor
blackheath
02083054239
tatiana.zenina@grantsaw.co.uk
Trisha Djemal
Trisha Djemal
Residential Property
Consultant Solicitor
blackheath
02083053546
trisha.djemal@grantsaw.co.uk
Tyrone Grant
Residential Property
Head of Leasehold Enfranchisement
blackheath
02083053522
tyrone.grant@grantsaw.co.uk
Denise
Accounts Staff
greenwich
02088586971
enquiries@grantsaw.co.uk
Jamie
Support Staff
Head of IT
greenwich
02088586971
enquiries@grantsaw.co.uk
Jayne Lye
Support Staff
Office Manager
greenwich
02083054204
jayne.lye@grantsaw.co.uk
Kasia
Accounts Staff
greenwich
02088586971
enquiries@grantsaw.co.uk
Michael Tobin
Michael Tobin
Support Staff
Marketing and Business Development Manager
greenwich
02083053550
michael.tobin@grantsaw.co.uk
Laura Danquah
Compliance Manager
greenwich
02083054222
laura.danquah@grantsaw.co.uk
Sue Holness
Support Staff
Customer Services
greenwich
02083054221
sue.holness@grantsaw.co.uk