Bankruptcy Trustee Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Bankruptcy Trustee, written in plain English, along with examples of how it is used.
What is Bankruptcy Trustee?
(n) Bank Ruptcy Trust is the person or authority who has been appointed by the court to deal with the assets of the person declared as bankrupt to safeguard the interests of the creditors.
History and Meaning of Bankruptcy Trustee
A bankruptcy trustee is a professional appointed by the court during bankruptcy proceedings to supervise the interests of the debtor and his creditors. The main role of a bankruptcy trustee is to liquidate the debtor's assets and use the proceeds to pay the creditors. The trustee has a fiduciary responsibility to make sure that the debtor’s creditors are treated fairly and that the debtor adheres to the provisions of bankruptcy law.
The role of bankruptcy trustee can be traced back to the 19th century when the U.S Congress enacted bankruptcy laws to help financially struggling individuals and businesses. The first bankruptcy trustee was appointed by the U.S District Court for the Southern District of New York in 1800s. Since then, the role of the bankruptcy trustee has continued to evolve to meet the changing needs of debtors and creditors.
Examples of Bankruptcy Trustee
- John was declared bankrupt by the court, and a bankruptcy trustee was appointed to oversee his assets and liabilities and coordinate with creditors.
- The role of the bankruptcy trustee in this case is to safeguard the debtor’s assets and ensure that they are distributed fairly to his creditors according to bankruptcy law.
- The bankruptcy trustee hired a team of appraisers to evaluate the debtor's assets to make sure that they are sold at their true market value.
- Sarah's company went bankrupt, and the bankruptcy trustee was appointed to oversee the liquidation of the company's assets and settlement of its creditors.
- The bankruptcy trustee filed a motion requesting the debtor to provide tax returns and bank statements to ensure that all assets are accounted for.
Legal Terms Similar to Bankruptcy Trustee
- Receiver: A similar concept to a bankruptcy trustee, but in the context of a court proceeding that isn't a bankruptcy case.
- Conservator: An individual or entity appointed by the court to oversee and manage the assets of someone who is physically or mentally incapacitated.
- Executor: An individual named in someone's will to manage and distribute the deceased’s assets according to the will's instructions.
- Trustee in bankruptcy: Another term used to refer to a bankruptcy trustee.
- Liquidator: An individual or entity who is appointed to oversee and manage the liquidation of a company's assets.