Bankruptcy trustee: rights, obligations, appealing against the actions of an arbitration trustee in bankruptcy proceedings in 2021

When discussing bankruptcy issues for commercial organizations, you can often hear the term “bankruptcy insolvency practitioner.” This person is given a significant place in this procedure, but not all participants in the bankruptcy process know what powers the bankruptcy trustee is vested with, as well as what responsibilities lie on his shoulders.

Federal Law No. 127 “On Insolvency and Bankruptcy” answers this question in more detail. In accordance with this legal act, a bankruptcy trustee is recognized as a person who has been appointed by the arbitration court. A person is appointed in a situation when it comes to making a decision to declare a debtor bankrupt. After the appointment of a manager, the stage of opening proceedings on a competitive basis begins, which is the final stage of filing the bankruptcy of the enterprise.

Bankruptcy proceedings represent the final bankruptcy procedure that was initiated against a commercial organization that was in debt. Production implies a procedure that is aimed at satisfying the requirements of borrowers and lenders. The duration of the procedure is six months; it is possible to extend this period for another six months at the request of the participants.

After this procedure is completed, the corresponding consequences occur. These include:

termination of accrual of fines, penalties, as well as other charges for failure to fulfill obligations in relation to creditors,
the deadline for fulfilling obligations comes,
enforcement proceedings are terminated,
all transactions with the debtor's real and movable property that could affect its transfer to third parties are terminated.

Appointment of a bankruptcy trustee

The procedure for appointing a bankruptcy trustee has a number of nuances that must be observed. According to general rules, a person is appointed to the position of manager by an arbitration court. This happens during bankruptcy proceedings. From the moment a manager is introduced into the business, he bears the burden of responsibility, as well as a lot of rights and obligations.

The procedure for appointing a bankruptcy trustee can be divided into several stages.

First, the debtor must officially receive bankruptcy status. This status is assigned to him by the Arbitration Court during a court hearing.
The court must find out whether the parties represented by the debtor and creditors have a person who can become a candidate for the position of administrator. The parties may submit one candidate each, or may also abstain from this opportunity.
Submitted candidates undergo a verification procedure. According to the general rules, these persons must meet all the requirements for the position of bankruptcy manager.
The person who, in the opinion of the court, inspires the most confidence becomes the manager.

There are often situations when the parties cannot propose a candidate. In this case, the court reserves the right to contact the organization of insolvency practitioners.

On behalf of the Arbitration Court, a request is submitted to provide the person sought.
The court receives from the above-mentioned organization a whole list containing information about possible candidates.
The one most suitable for this role is selected. It is worth considering that the organization of insolvency practitioners helps the court make a choice, because when forming a list, persons are presented in descending order of their professional qualities.
The debtor and creditor can also take part in selecting a bankruptcy trustee from the list. If they do not agree with the opinion of the court, then during the hearing they can file a challenge.
If there are no challenges, the court approves the candidate for the position of manager and authorizes him to begin business.

Financial manager. One of the key figures in the bankruptcy case

Rights and obligations of the manager, cost of his services

When considering bankruptcy cases, the participation of a financial (arbitration) manager is mandatory. This is stipulated in the Law “On Bankruptcy of Individuals”. Without exaggeration, we can say that the outcome of the case largely depends on him.

During the bankruptcy procedure of an individual, the bankruptcy trustee coordinates the debtor’s finances in order to protect his interests, but at the same time, his activities are aimed at satisfying the needs of creditors to the maximum possible extent through the partial or complete sale of the property of the person in respect of whom the bankruptcy procedure is being carried out.

The selection of an arbitration manager is carried out from among the members of the SRO (self-regulatory organization) based on the proposal of the party initiating the bankruptcy procedure. Thus, both the debtor and the creditor have the right to nominate a manager. Therefore, the debtor should not delay the bankruptcy procedure, otherwise in court they will defend not his position, but the interests of the creditors.

An arbitration manager is appointed by the court at the first meeting after he recognizes the grounds for introducing bankruptcy proceedings. Then it is determined which procedure will be introduced: debt restructuring or sale of property. It is beneficial for a bankrupt to immediately proceed to the sale of property and not waste time on other procedures, since debt restructuring does not relieve debts, but extends their repayment period - up to 3 years.

The arbitration manager must be a member of one of the SROs.

Self-regulatory organization of arbitration managers -

a non-profit organization, information about which is included in the unified state one. The goals of the SRO are to regulate and support the activities of insolvency practitioners. Only candidates who meet the following requirements can become members of the SRO:

· citizenship of the Russian Federation;

· registration as an individual entrepreneur;

· higher education;

· At least one year of experience in a managerial position;

· certificate from the theoretical exam for the training program for arbitration managers;

· internship as an assistant to an arbitration manager for 2 years.

· lack of punishment for committing an administrative offense or conviction for committing an intentional crime;

· the presence of a compulsory insurance agreement for liability for possible damages to persons participating in the bankruptcy case and other persons in connection with failure to fulfill or improper performance of the duties assigned to him in the bankruptcy case.

In a bankruptcy case, the arbitration manager is vested with a number of rights and responsibilities

· official publication of information in the Kommersant newspaper and on the website of the Unified Register of Bankruptcy Information (EFRS).

This is necessary so that potential creditors are notified of the citizen’s insolvency and have the opportunity to enter the register of creditors’ claims (upon completion of the procedure for the sale of property and after a court hearing based on the results of the report, they will no longer be able to file claims against the defaulter). Potential creditors are given two months to enter the register by submitting an application to the arbitration court.

· analysis of a citizen’s financial condition.

The manager assesses the financial and economic activities of both the citizen and his spouse (if any) in order to obtain the information necessary for drawing up a financial report. It is on the basis of this document that a court decision is made to release the debtor from financial obligations (debt write-off). In addition, this information is necessary to assess the possibility of appealing transactions made by the bankrupt over the past three years.

· challenging transactions made within three years before filing an insolvency petition;

According to the law, all transactions carried out by the debtor over the past 3 years are subject to verification. The court can decide to challenge transactions only if they are proven to be dubious. For example, if the deal was concluded between relatives or at a reduced price. The fact of donation may also be disputed.

· application of measures to protect his property;

· control of creditors' claims;

· holding a meeting of creditors;

If the debtor undergoes a restructuring procedure, the insolvency practitioner is obliged to hold a meeting of creditors. It examines the possibility of concluding compromise solutions between the lender and the borrower (debt restructuring, concluding a settlement agreement). If it is not possible to make such decisions (not in practice - 99% of cases), he recommends that the court introduce a procedure for the sale of property.

· assessment and compensation of debts to creditors and third parties through the sale of the defaulter’s property.

At this stage, the manager evaluates the property and sells it. If they are immovable, then the platform for its sale must be electronic.

· Drawing up a report on the financial condition of the bankrupt.

Upon completion of the property sale procedure, the manager draws up a report on the financial position of the debtor. It reflects information about the property of the spouses, information about debts and income, the results of the sale of property (if there was property available for sale as part of the bankruptcy procedure), as well as opinions about the presence or absence of intentional actions that led to bankruptcy.

After submitting the specified report to the court, a court hearing is scheduled to sum up the results of the procedures carried out. The issue of debt write-off is discussed at the meeting.

Payment of remuneration for the activities of the arbitration manager

in a bankruptcy case is determined by amendments to the Insolvency Law. Today it is 25 thousand rubles. The bankrupt citizen must deposit this amount with the arbitration court. Moreover, 25 thousand rubles is the price for only one procedure in a bankruptcy case. We remind you that there can be two of them: debt restructuring and property sale.

As practice shows, not a single qualified specialist is ready to provide services for such a fee. Neither the debtor nor the court can oblige him to carry out the procedure for this amount. The arbitration manager determines the cost of services independently. According to statistics, today the price for their services varies from 120 to 160 thousand rubles. The final cost is entirely individual. Thus, the debtor will still have to negotiate payment either directly with the bankruptcy manager or with firms that deal with bankruptcy of individuals.

Dmitry TokarevGeneral Director of NCB
Our company employs experienced and highly qualified arbitration managers. They have dozens of completed cases in favor of our clients, and more than 300 million rubles of debts written off. By choosing us for cooperation, you will receive a comprehensive opportunity to constantly keep your finger on the pulse of your business and a guaranteed successful result.

Rights of an arbitration manager in bankruptcy proceedings

The position of a bankruptcy trustee obliges a person to assume a large layer of rights and responsibilities. The rights and obligations of such a person are listed in the Federal Law “On Insolvency or Bankruptcy” No. 127.

For your information

The bankruptcy trustee does not carry out his activities for free. After the parties jointly decide to approve a person for the position of arbitration manager, the amount of remuneration for participation is determined. A determination is made about this fact, which must be executed. The court's ruling on remuneration cannot by law be appealed.

The powers of the bankruptcy trustee begin from the moment of his approval and are valid until the completion of bankruptcy proceedings. As part of the insolvency procedure for a legal entity, the manager is vested with a huge range of powers. At the same time, with the mutual desire of the parties, rights can be expanded, but their reduction is not provided for by law.

During bankruptcy proceedings, the administrator is authorized to dispose of property that legally belongs to the debtor.
Has the right to declare refusal to fulfill the terms of the agreement and transactions. However, he does not have the right to declare a refusal to execute the debtor’s transactions in a situation where there are circumstances that impede the restoration of the debtor’s solvency function.
The bankruptcy trustee is authorized to bring claims that are intended to invalidate transactions concluded on behalf of the debtor.
The bankruptcy trustee is vested with the authority to dismiss employees operating in the debtor’s organization. Also, he is subject to the dismissal of the manager.
The manager transfers documents related to the debtor for safekeeping to any person who inspires trust.
The bankruptcy trustee has the right to exercise other rights assigned to him, which in one way or another may be related to the performance of duties under the procedure.

Restoring the debtor's accounts: fact or fiction?

Restore tax and accounting records for the previous three years! You shouldn't even talk about it, much less do it. Restoring reporting does not correspond to the goals of the bankruptcy trustee, which means that he should not do this. The limit necessary in the “reporting business” is to continue to conduct what is. And if there is nothing, then start keeping your own records. No more, everything else is unnecessary!

Sometimes, after an organization has been excluded from the register, the tax authorities step in and begin demanding reports, letters or some papers. But, the powers of the manager have been removed, the bankruptcy proceedings have been completed, and at this stage any requirements for the ex-arbitration party are illegal. The most correct position in such a situation is not to react, because once you start responding to such statements, things will go very far.

Get legal advice

Responsibilities of the bankruptcy trustee

In addition to rights, the manager is also assigned responsibilities. All of them are provided for by Federal Law No. 127 and are mandatory.

The bankruptcy trustee takes the debtor's property into his direct jurisdiction.
He also conducts an inventory of property.
Notifies employees working in the debtor's organization that they will soon be fired. In this case, the deadline is observed, no later than one calendar month from the date of initiation of bankruptcy proceedings.
The manager must analyze the financial condition of the bankrupt and document the analysis. The manager is obliged to raise objections that are related to the illegal demands of creditors.
A person takes various measures aimed at searching for and returning the debtor’s property, which for some reason is in the possession of other persons.
The manager involves a specialist in the procedure - an independent appraiser who carries out the procedure for assessing the property assigned to the debtor.
Obliged to take measures to ensure the safety of the person’s property.
Obliged to make demands on third parties for the return of the debt to the debtor, in a situation where there are such encumbrances.
Obliges to maintain a register in which all claims of creditors will be recorded.
Also, the bankruptcy trustee undertakes to fulfill other duties that may be established by the court in connection with the bankruptcy law.

Who can be a financial manager

The court appoints a manager from representatives of a self-regulatory organization (SRO) selected by the applicant (debtor or creditor - the one who initiated the bankruptcy procedure). The manager has the right to refuse or officially agree to participate.

How to find out who your arbitration manager is?

Information about who the arbitration manager is in a particular case can be obtained from the EFRB - the Unified Federal Register of Bankruptcy Information. To do this, simply enter the debtor's first and last name in the special search field.

It is not necessary to fill out all fields of the form. From the search results, select the desired option and open the debtor’s card

The debtor's card contains information about the financial manager in the case

Responsibility of the arbitration manager in bankruptcy proceedings

An entire article under number 20. 4 of Federal Law 127 is devoted to measures of liability of the bankruptcy trustee.

In accordance with this norm, for improper performance of the duties assigned to him by the court, a person is removed from participation in the process.
Gross violation of duties, as well as failure to comply with court requirements, entails disqualification and removal from the process.
The bankruptcy arbitration manager also bears financial responsibility. He is obliged to compensate the parties, as well as third parties, for all losses that were caused as a result of the manager’s failure to properly fulfill his duties.
An arbitration manager may be expelled from his self-regulatory organization of managers in a situation where he has repeatedly violated the requirements of the court, neglecting his duties, which entails losses on the part of the creditor and debtor.

Remuneration to a financial specialist in case of bankruptcy of individuals

When personal bankruptcy occurs, the financial manager plays an important role in this process. Payment for his services is carried out in accordance with Article 213.9 of Federal Law No. 127-FZ. The established amount is 25,000 rubles for one insolvency procedure. Additionally, the debtor pays funds in the amount of 7% of the proceeds from the sale of property.

According to the law, the manager’s remuneration can be paid by one bankrupt several times for different procedures:

For preparation of debt restructuring.
For the sale of property at electronic auctions.
For signing a settlement agreement.

An initial payment in the amount of 25,000 rubles is paid when submitting an application to the court. The funds go into the court's escrow account. The remaining 7% must be paid first after the sale of the debtor’s property on the electronic platform.

Action plan

When exercising his powers during the trial, the bankruptcy trustee adheres to the following plan.

After his candidacy has been approved by the court, the manager must replace all areas of management of the organization that belongs to the debtor.
The manager takes over the management of the organization, and at the same time replaces the debtor.
He can enter into relationships with counterparties and forms a bankruptcy estate, which means all the material assets and funds that remain at the disposal of the debtor. It is these assets that should be used to repay debts to creditors.
The bankruptcy trustee assumes the authority to receive funds through sale, lease, and also carries out other actions that can bring profit.
After all actions for the sale and disposal of property in order to obtain additional assets have been taken, the manager moves on to the next stage. He describes all property and initiates the inventory procedure. It includes carrying out an assessment, as well as the sale of property. At the same time, the sale can be carried out either in one mass, that is, transfer to one owner, or carried out in the form of an auction, when the property is split into several parts.
Funds are transferred to creditors' accounts in order of priority. The bankruptcy trustee himself carries out this action and maintains a register of claims.
As soon as the funds are paid, he releases claims from creditors whose debt was repaid.
The register of claims is closed only when creditors have no claims against the debtor.
After completion of all calculations, the state, represented by the Arbitration Court, receives a report on the activities that were carried out by the bankruptcy trustee. Documentation is attached to the report, which has a name and liquidation balance sheet.
Upon verification of the report and papers, the manager receives money for his actions and can assume that he has fulfilled all the necessary requirements and obligations.

Groups of debtors, cost of services and introduction of a point system for SROs

First. The amendments, once adopted, will introduce a division of debtors by income level:

First group. Individuals and individual entrepreneurs, as well as all organizations that meet the cut-off value of assets of no more than 300 million rubles and an annual income of no more than 800 million rubles.
Second group. Individual entrepreneurs and companies with income from 800 million to 2 billion rubles.
Third group. Individual entrepreneurs and enterprises with income over 2 billion rubles.

Second. It was previously written that the bankruptcy procedure itself will become significantly more expensive for individuals—the cost of the services of insolvency practitioners. Such changes are not announced in the note to the bill. This means that this issue is still debatable. That is, the final decision on whether to put to a vote an increase in the cost of management services must be made by Duma committees during June. Already in the summer of 2021, it became clear that the Duma deputies left the decision on this issue to the people’s representatives of the new convocation.

But it is already known that “flexible” percentages will change, which depend on the value of the property sold by managers at auction. The remuneration paid from the value of the property being sold to the manager is now 7%. The amendments propose increasing it to 10%.

Remuneration of the bankruptcy trustee

The issue of remuneration for the bankruptcy manager is also covered in Federal Law on Bankruptcy No. 127. To do this, you must refer to Article 20. 6. The manager has the right to receive remuneration, and also, in a situation where a person has incurred expenses during the procedure, has the right to receive them replenishment The funds that make up the amount of remuneration are paid not from the funds of the state, but from the funds of the debtor, in the situation, if any.

Information

The reward is only a fixed amount, which is agreed upon in advance in court. However, the law contains a mention of the approximate amount of payment per month. For the production manager, a remuneration of 30,000 rubles is provided for one calendar month. If for some reason a person is removed from carrying out his activities right in the middle of the process, then the remuneration is paid until the date that was the last before the release or removal.

Creditors can also participate in the appointment of additional remuneration for the bankruptcy trustee. At the same time, the amount of additional remuneration is formed at the expense of creditors.

It is worth paying attention to such a point as the amount of interest for the remuneration of such a person. 3% of the amount of payments to creditors is received by a person in a situation where he has satisfied less than 25% of the claims.

4.5% is received in a situation where the amount is approximately 25%.
6% of the total amount of payments in a situation where more than 50% of the claims are satisfied.
7% in a situation where we are talking about an amount of more than 70%.

In order to accurately calculate the amount of interest, it is necessary to use financial statements based on the state of the debtor’s assets.

Why do you need a manager?

A trustee in personal bankruptcy cases is needed not only to manage all the affairs of a potential bankrupt - he must also control the initiation of proceedings by the court. When filing a bankruptcy application with the court, a citizen provides a package of documents containing a list of SROs from which he must choose a specialist.

After accepting the documents, the court sends requests to the specified SRO and asks to present at the court hearing the candidacy of a bankruptcy trustee, who will represent the interests of the debtor.

In this situation, the following options are possible:

It is not possible to select the right specialist, since none of the candidates wants to handle the case of a potential bankrupt. In this case, if a candidate is not found within 3 months, the case will not be considered in court.
A manager will be selected who will be assigned certain functions and after some time the first meeting will be scheduled.

Lawyers advise finding a suitable candidate in advance and officially approving her. On specialized judicial websites you can always ask a question and get a free consultation on how to choose the right specialist.

Expenses

In the course of carrying out actions aimed at participating in the bankruptcy procedure, the manager may incur expenses. They may be associated with a procedure that is necessary to identify the situation with the debtor’s assets. Also, expenses can be incurred to pay for the work of such specialists as an appraiser, operator, registrar, auditor, accountant, and so on.

Sometimes funds are used to pay for the services of third parties who assist in fulfilling the duties of the manager. All possible situations that are associated with costs are listed in Article 20 of Federal Law No. 127. It is worth noting that in a situation, even if the manager makes payments out of his own pocket, all expenses are reimbursed to him from the funds of the appraiser. This norm is provided for in Article 20. 7.

Report of the arbitration manager in bankruptcy proceedings

Upon completion of his work, the bankruptcy trustee must submit a report to the arbitration station. The report must be submitted electronically and in printed form.

The document is drawn up on an A4 sheet in computer font. The date and place of its compilation are indicated.
Information about the arbitration manager must be indicated in the header.
The second paragraph specifies information about persons who may be involved by the manager for mediation.
The third paragraph indicates information about existing complaints about the manager’s actions.
An important point is to indicate information about the manager’s exercise of his rights and obligations.
The most important thing is to list information about the bankruptcy estate, which is expressed in property and financial assets.
If possible, the measures taken by the manager to preserve the property are indicated.
All the time, the manager kept a register of creditors' claims, and it is this that he must include.
Information about the amount of claims that apply to the debtor is indicated.
Information about the debtor's employees is indicated.
If the manager incurred any expenses, they must also be indicated.
If third parties were involved in the activity, this must also be written about.
The report is accompanied by a register of claims, documents that in one way or another confirm the expenses incurred, as well as additional papers that occur in a particular case.
The name of the manager, signature, and seal of the organization are indicated.

In accordance with Article 147 of the Federal Bankruptcy Law, all of the above requirements are legal. The report is sent to the court, of which the bankruptcy trustee must notify the parties represented by the creditor and the debtor.

New amendments will be made to the law in 2021

Serious changes are expected in the Bankruptcy Law in 2021. First Deputy Prime Minister of the Russian Federation Andrei Belousov announced the prepared amendments. Dolzhnikov - physical. persons wishing to go through bankruptcy will be divided into three groups - according to their income level.

An increase in the fee for the work of financial managers by 4 times is being discussed - from 25 thousand rubles for each procedure (debt restructuring and sale of property) to 100 thousand rubles. Although the deputies may not accept this amendment, it is already known that the main changes are supported by the Duma Committee on Property.

Financial managers will be selected differently than now, and in general the institution of arbitration managers will be globally reformed.

The Russian Union of Industrialists and Entrepreneurs (RSPP) opposes many of the amendments - let us remind you that the law speaks not only about the bankruptcy of individuals. individuals, but also about the insolvency procedure of companies. But experience shows that with an active government lobby, the State Duma passes laws very quickly, sometimes three readings take place in one week.

Appealing actions

If for any reason the parties believe that the actions of the bankruptcy trustee are illegal and violate their rights, then they can try to appeal these actions. There are several ways to do this.

First of all, you can draw up a petition, which will look like a statement or complaint, and send it to the arbitration court. Upon consideration of your petition, the judge, if there are legal grounds, will issue a warning to the manager.
The second way to appeal the action is to file an application with law enforcement agencies. You can contact the prosecutor's office with a statement that your rights are being violated.
You can also file a complaint with other government agencies, for example, the Federal Tax Service of Russia.
If you want to directly influence the manager, then the complaint must be submitted to the self-regulatory organization of managers where the person who violated your rights operates.

In order for a complaint to be considered and satisfied, there must be compelling reasons. Therefore, before making such requests, seek legal assistance, because only a specialist with in-depth knowledge will help you understand which actions could violate your rights and legitimate interests and which did not. If you nevertheless brought the case to court, then please provide specific arguments that will confirm the wording of your complaint.

For your information

Upon review, the court may satisfy your claims either in full or in part. In a situation where your arguments turn out to be implausible, the court will reject your claims and recognize the actions of the bankruptcy trustee as legal.

Sample application for bankruptcy of a legal entity

There is no universal model for all cases of insolvency. On the Internet and on various legal websites you can find both brief and detailed sample statements taken from real cases.

Using them “blindly” without understanding the specifics of the bankruptcy procedure is fraught with consequences: an experienced lawyer should draw up a statement or, at a minimum, check it.

Below is a sample application for bankruptcy of a legal entity for your reference.

Application to the Arbitration Court for bankruptcy of a legal entity

Change of bankruptcy trustee

Changing a bankruptcy trustee is a fairly private practice. You can resort to it in a situation if for some reason this person does not suit you, if he was expelled from the organization where he carried out activities, and also, he was removed by the plaintiff or defendant in the case, as well as in a situation if the manager neglected his duties, was dishonest about the responsibilities that might be assigned to him.

The parties must present their demands to the court in the form of a petition. The court is obliged to consider this appeal and make a decision. As a rule, if there is reason to believe that the manager committed a violation in his activities, the court will satisfy the demands of the parties. In exchange, the parties may nominate their candidates for the position of managers. If there are none, then a list of possible candidates from the relevant organization is provided to the court. By joint selection, the defendant, plaintiff and judge are determined on a candidate.

Frequent violations of the bankruptcy trustee

In practice, violations in the activities of bankruptcy trustees are often encountered. This is due to a lack of attentiveness, meticulousness, and also, in some way, due to a lack of experience.

Example

The bankruptcy trustee is not attentive to the claims of creditors, forgetting to enter them into the register. When carrying out the inventory procedure of the debtor's property, the bankruptcy trustee often makes errors in the assessment, neglecting the services of appraisers. The report is often sent back to correct deficiencies. But I would like to believe that if you are facing a procedure with the participation of a bankruptcy trustee, you will not encounter arbitrariness and mistakes on his part. The outcome of your case depends on the clarity and accuracy of this specialist’s work.