What is the Function of a Trustee in Bankruptcy?

The Trustee will make all appropriate investigations into the bankrupt estate and the financial affairs of the bankrupt.  These investigations can date back to a certain period in order to ascertain whether or not invalid transactions have taken place, such as transactions and/or transfers that were done in order to defeat creditors or make preferential payments.

The trustee may report their investigations to the Insolvency and Trustee Service Australia (ITSA). When appropriate investigations have taken place and the divisible estate has been realised, the Trustee will then make distributions to creditors in proportion to their debts. The Trustee will have an unbiased approach, with the objective of ascertaining the divisible value of the bankrupt estate and then making appropriate distributions to creditors in order to satisfy the debt.

Duties of the trustee

             (1)  The duties of the trustee of the estate of a bankrupt include the following:

                      (a)  notifying the bankrupt‘s creditors of the bankruptcy;

                      (b)  determining whether the estate includes property that can be realised to pay a dividend to creditors;

                      (c)  reporting to creditors within 3 months of the date of the bankruptcy on the likelihood of creditors

     receiving a dividend before the end of the bankruptcy;

                      (d)  giving information about the administration of the estate to a creditor who reasonably requests it;

                      (e)  determining whether the bankrupt has made a transfer of property that is void against the trustee;

                       (f)  taking appropriate steps to recover property for the benefit of the estate;

                      (g)  taking whatever action is practicable to try to ensure that the bankrupt discharges all of the

     bankrupt‘s duties under this Act;

                      (h)  considering whether the bankrupt has committed an offense against this Act;

                       (i)  referring to the Inspector-General, or to relevant law enforcement authorities, any evidence of an

     offense by the bankrupt against this Act;

                       (j)  administering the estate as efficiently as possible by avoiding unnecessary expense;

                      (k)  exercising powers and performing functions in a commercially sound way.

 (2)  Where a person who became a bankrupt on a creditor‘s petition is unable to prepare a proper statement of affairs, the trustee may employ, at the expense of the estate, a qualified person to assist in the preparation of the statement.