Obligations of an insolvency practitioner

The obligations of an insolvency administrator depend on how the insolvency is to be handled.

In bankruptcy proceedings, the insolvency practitioner assumes authorisation to dispose of the estate, to exercise rights and to discharge obligations pertaining to the debtor in estate-related matters. In particular, the insolvency practitioner exercises shareholder rights attached to shares that have been included in the insolvency estate, acts in the capacity of employer in relation to the debtor’s employees, and is responsible for the operation of the debtor’s plant, bookkeeping and tax compliance. Insolvency practitioners are typically tasked with realising the estate.

In reorganisation procedure, insolvency practitioners primarily supervise the activities of a debtor in possession, continue to identify and inventory the estate, conduct incidental disputes, compile and add to the list of creditors, and report to the creditors’ committee. The powers of the debtor’s general meeting or members’ meeting also pass to insolvency practitioners.

In debt relief procedure, insolvency practitioners work together with the insolvency court and creditors to supervise the debtor and the debtor’s operations, realise the debtor’s assets, and allocate monthly payments under the repayment schedule among the creditors.

read more