Does The Trustee Conduct Any Investigations?
The Trustee typically reviews transactions involving the Bankrupt Company for a period of up to five years prior to the date of bankruptcy or filing of a Proposal. The review is focused on transactions involving circumstances where the Bankrupt transferred assets to any person(s) for other than fair value, or where any Creditor(s) received preference over other Creditors by payment or by the giving of Security. Depending upon the results of the investigation, in a bankruptcy, the Trustee may commence legal action to reverse these transactions or recover assets. In a Proposal, the Trustee may conduct a similar investigation and report the results to the Creditors so that they can make an informed decision with respect to accepting or rejecting the Proposal. If the Proposal does not address suspicious or offencive transactions, the Creditors may be inclined to reject the Proposal, resulting in the bankruptcy of the Company, and have the Trustee attack the transactions.
You may be required to attend at the Office of the Official Receiver for an examination under oath, as to the facts relating to the bankruptcy. The Trustee will also investigate any transactions prior to bankruptcy involving circumstances where the bankrupt transferred assets to any person(s) for other than fair value, or where any creditor(s) received preference over other creditors by payment or by the giving of security. The Trustee may commence legal action to reverse these transactions.
