Bankruptcy and the trustee
Insolvency lawyers in The Netherlands
After a bankruptcy has been declared, the trustee is appointed. Bankruptcy can be declared at the petition of the company itself or at the petition of one of its creditors. The court declaring the bankruptcy shall appoint a trustee. Usually the trustee is an attorney practicing in the district where the bankruptcy is declared. These attorneys specialize in insolvency law and are known as such at the court.
The Dutch trustee’s duties
The main duty of the trustee is to liquidate (wind up) the company and to collect as much money as possible with which (part of) the claims of creditors can be paid. To actively collect this money, the trustee shall sell the company’s inventory and stock. If possible, he shall sell these assets for a restart, so he can also charge an amount for the company’s remaining goodwill. The trustee shall also attempt to collect from the outstanding debtors, sometimes by engaging an attorney.
The trustee investigates liabilities
Another of the trustee’s duties is to investigate whether the board of management can be held liable. If there was mismanagement, and thus liability of the managing directors, the trustee shall request the managing directors to pay (part of) the deficit in the bankruptcy. If the managing directors fail to comply with this request, the trustee can decide to take legal action against the managing directors.
Fraud: fraudulent transactions
The trustee shall also investigate any fraudulent transactions. A fraudulent transaction is when, prior to the bankruptcy, assets of the company have been embezzled. This can be done in various ways. For example, there is a prohibition against selling assets of the company for too low a price to an acquaintance, but also against selling assets for the right sales price to a creditor, immediately prior to a bankruptcy, and then set off the purchase price against this creditor’s claim on the company. In this case, the purchase price was not to the benefit of the joint creditors, but only the buyer of these assets got some returns.
The examining magistrate in a bankruptcy
When bankruptcy is declared, not only a trustee, but also an examining magistrate is appointed. The main duty of the examining magistrate is to supervise the trustee. For example, the trustee has to ask the examining magistrate’s permission to take legal action against a debtor who is unwilling to pay or against a managing director for liability of managing directors, but also to dismiss staff or terminate a rental agreement. Thus, the examining magistrate has a supervisory role.
Dutch law firm in Amsterdam
Our law firm has insolvency lawyers that are very experienced in insolvency law. Our lawyers are regularly appointed as trustees in bankruptcies, so they know very well what issues are of interest in a bankruptcy situation. They can also advise you on the next steps in the bankruptcy process, and they can assist you in legal action against the trustee.