Bankruptcy is a complex and lengthy procedure, the main purpose of which is recognition of the debtor insolvent. It consists of several stages, each of which has its own characteristics. When conducting monitoring, an interim bankruptcy manager must be appointed. He is endowed with numerous rights and obligations. The main purpose of his appointment is to study the financial condition of the debtor in order to understand whether he will be able to restore his solvency in various ways or whether it is advisable to immediately proceed to bankruptcy proceedings.
Manager role
Bankruptcy interim manager is appointed exclusively by the court. But then he has the right to independently make various economic decisions aimed at improving the debtor. Features of attracting an interim trustee in a bankruptcy case include:
- he fulfills his duties in the process of observation;
- all financial matters are agreed by the director of the company with this specialist, therefore it will not be possible to complete transactions aimed at the sale or loss of property, and there will also be no opportunity to issue new loans;
- the manager must post information in open sources that a bankruptcy process is ongoing in relation to a particular company.
It is on the basis of the data obtained by this specialist that we can determine what further actions will be performed by the court, the debtor and the creditors. Often a temporary administrator reveals a deliberate bankruptcy on the part of the debtor. Under such conditions, the procedure is terminated, and the company is prosecuted.
What rights does the manager have?
The interim manager in bankruptcy is endowed with numerous opportunities. He is necessarily represented by an individual. The basic rights of a manager include:
- filing claims in court related to the recognition of various previously concluded transactions as invalid or void;
- application of measures, the main purpose of which is to ensure the integrity and safety of property held by the debtor;
- cancellation of decisions previously made by the debtor;
- the study of whether the participation of the debtor in various activities aimed at reducing and selling his property was authorized;
- control over the activities of a bankrupt;
- filing a petition, on the basis of which the head of the enterprise is removed from his duties;
- receiving data or documents related to the work of the organization.
Due to the above possibilities, the manager can easily understand whether the procedure for recognizing the debtor as insolvent is legal and official.
Specialist Responsibilities
According to the law on bankruptcy, the interim manager is vested not only with various powers and capabilities, but also faces certain responsibilities. Among them are:
- replacement in the company of a past leader who is a debtor;
- determination of the reasons why the company was faced with the inability to repay debts;
- assessment of liquidity and value of property owned by the organization;
- analysis of the situation, which allows to determine whether it is possible in various ways to restore the solvency of the company;
- conducting an official appraisal to determine the value of individual assets and the business as a whole;
- identification of signs allowing to establish that bankruptcy was deliberate, and its main purpose was to avoid the need to return funds to creditors;
- formation of a register of creditors;
- holding a meeting of creditors where various issues are resolved.
A manager is appointed after the bankruptcy proceedings are initiated by the court against the debtor. Therefore, supervision is initially carried out in bankruptcy. The interim manager is determined by the court. The management of the company cannot influence or create obstacles for the manager, otherwise managers can be held accountable.
Signs of Intentional Bankruptcy
The appointment of a temporary bankruptcy manager is designed to solve many important problems, among which is the possibility of revealing that the head of the company intentionally brought his company to bankruptcy. A specialist can identify this situation if the following reasons exist:
- the financial documentation has corrections;
- partially destroyed documents important for the company;
- management deliberately hides various property;
- unprofitable transactions were recorded, the main purpose of which was the sale of the assets of the enterprise;
- it is revealed that, in the presence of funds, the debtor did not try to settle accounts with creditors;
- there is no information about where the founders of the company are actually responsible for the deplorable state of the enterprise.
If a fictitious or intentional bankruptcy is established, then the managers of the company cannot avoid responsibility, therefore they will be liable for the debts with their personal property.
Rules for choosing a specialist
Bankruptcy interim manager is appointed at the very first stage of this process. It is selected solely by the arbitral tribunal. Nominations are made by the court itself or by creditors.
Observation lasts as long as possible for three months, but if there are good reasons, the period can increase to 5 months. It is during this time that the interim manager acts.
Specialist Requirements
The bankruptcy procedure in which an interim trustee is appointed is called observation. During this period, the specialist must carefully analyze the causes of insolvency and the financial condition of the organization. Therefore, numerous requirements are imposed on him:
- there should be no administrative or criminal offenses or violations in the past;
- there is no interest in the results of bankruptcy; therefore, it is not allowed that the selected specialist be a relative of the creditors or the debtor;
- the citizen must have a license for activities related to the verification or control of the debtor;
- the manager is solely an individual, since firms cannot regulate cases involving federal law.
Although a specialist is selected only by a judge, each side of the case may propose its own candidates. First, the court must make sure that there are no any close relations between the selected manager and other participants in the process.
How is it assigned?
The law does not clearly define how an interim trustee is appointed in bankruptcy. Therefore, disagreements and controversial situations often arise between participants in the trial.
The work of a specialist begins simultaneously with the observation procedure. For this, an employee of a specific SRO proposed by creditors is selected. A candidate registered in court may be used if there are no proposals from the participants in the case.
What procedures are performed?
According to the Federal Law "On Bankruptcy", the interim manager is endowed with numerous opportunities and privileges. He can perform all kinds of procedures aimed at observing the interests of debtors and creditors.The main such processes include the following:
- publishes information about the bankruptcy of a particular company in open sources;
- notifications of the beginning of monitoring are sent to all creditors and law enforcement agencies;
- within 10 days, all interested parties are notified of the beginning of the bankruptcy of the company, and this includes not only creditors, but also co-founders, business partners, staff and other persons;
- analyzes the financial activities of the company over the past two years, for which various documents, reports and acts on transactions are studied;
- all creditors and their claims are considered, since they must be legal;
- work is underway that provides an opportunity to get an answer about the need for bankruptcy, as often signs are revealed that allow the company to continue working after reorganization;
- Examination of assets owned by the enterprise to determine whether all debts will be repaid after the sale of property;
- five days before the court hearing, documents collected on the basis of the work performed are prepared and sent;
- a meeting of creditors is being held;
- the procedure is determined on the basis of which compensation for damage to creditors will take place;
- if violations in the operation of the enterprise have been identified, then an application is submitted to law enforcement authorities, on the basis of which an audit is carried out in relation to the debtor company.
As soon as the observation process is completed, in court the administrator represents an uninterested party. Only after this is his removal from office.
Reporting Rules
After completing all the procedures, the manager must draw up a report that includes a description of the results achieved. Be sure to include information in this document:
- about the company or person recognized by the debtor;
- information related to the appointed manager;
- data on persons involved in this case;
- information related to the rights and obligations of a specialist;
- All notifications sent to creditors or government organizations are listed;
- a list of completed activities is provided;
- indicates the actions by which it was possible to preserve the property of the debtor company;
- all identified creditors and their requirements are listed;
- the information obtained as a result of the analysis of the financial condition of the debtor is entered;
- information is given regarding the meeting of creditors and the results achieved.
Most often a document is compiled using three different sections. Specialists prefer to use special types of forms.
Manager's Compensation
The manager for his work may require a certain fee, which consists of a fixed salary and accrued interest.
The manager's fee is considered the first payment after bankruptcy proceedings or recovery. Additionally, the specialist requires compensation for all expenses incurred.
Conclusion
The interim manager is appointed only during the bankruptcy supervision procedure. He is endowed with many powers and responsibilities. For his activities, he may require appropriate remuneration.
After the observation is completed, another manager is appointed. Each specialist must meet numerous requirements, and it is important that he has the necessary knowledge and skills to carry out work on assessing the state of enterprises.