A trustee is the figure in charge of representing and defending the interests of an organization in bankruptcy proceedings or bankruptcy proceedings.
This role is present in the regulation of most countries within the insolvency law literature. In other words, the work to be performed by a trustee acquires greater importance in extreme situations.
In this way, highlighting bankruptcy or creditors' proceedings, these representatives are in charge of taking the direction and administration of a company instead of the original or usual administrators or managers.
Although it is possible from the legal point of view the performance of a trustee in the form of an individual natural person, the appearance of groups known as bankruptcy administration is more common.
It is usually a figure that is resorted to by judicial provision and in the absence of a bankruptcy agreement.
Trustee's main goal
In situations in which an organization such as a commercial company is in bankruptcy, the figure of the trustee is appointed as responsible for liquidating the assets and liabilities of the debtor party.
Thanks to the appointment process, this person acquires all the administrative powers in order to carry out the aforementioned liquidation.
In this sense, the main objective of the liquidator in bankruptcy cases is the organization of the finances of the bankrupt entity and the guarantee that the largest number of creditors recover their outstanding amount.
Outstanding work of the trustee
To carry out its mission in an organized manner and in compliance with bankruptcy law, a trustee must perform the following tasks:
- Inventory preparation and auditing. The idea is to know the available assets and with which to meet the due obligations.
- Satisfaction of outstanding debts and execution of contracts without payment.
- Assumption of all administrative tasks and representation of the organization against communications and legal responsibilities.
- Carrying out the final liquidation and termination of the company's activity.
Other applications of the trustee concept in economics
Although the economic concept of trustee responds to its application to commercial law, this term also has other applications in economic practice.
This is the case with those cases of debts or situations of non-payment, where the trustee is the agent responsible for the recovery of outstanding debts.
This responsibility has to do with the objective of guaranteeing the highest possible benefit. It will proceed from the respective confiscations of assets that make up the debtor's assets, which must compensate for the contracted and unpaid debt.
On the other hand, the presence of trustees in cooperative societies or other types of organizations is also frequent. In such cases, this figure is identified with the main administrator of the same in representation of its partners and in defense of their interests.