What is a “liquidating trustee” in a Chapter 11 bankruptcy?

In a Chapter 11 bankruptcy, a “liquidating trustee” is a court-appointed official who is responsible for liquidating (selling off) the assets of the debtor, or bankrupt business. The proceeds from the sale are used to pay off the debtor’s creditors. A liquidating trustee is appointed when a Chapter 11 bankruptcy case is filed. The duties of a liquidating trustee vary from case to case, but generally involve managing and selling off the debtor’s assets in order to satisfy the claims of creditors. The liquidating trustee also has other responsibilities, such as reporting to the court, attending court hearings, and ensuring that the debtor’s assets are distributed to creditors in a fair and equitable manner. The liquidating trustee also reviews documents filed with the court to ensure accuracy and consistency. In South Carolina, the court will appoint a liquidating trustee in any Chapter 11 bankruptcy case. The liquidating trustee is paid from the proceeds of the sale of assets, and the fee must be approved by the court. The liquidating trustee has a fiduciary duty to act in the best interests of the creditors and must follow the guidelines set forth by the court. The liquidating trustee is also responsible for filing reports with the court regarding the status of the case and the distribution of assets. Once all of the assets have been liquidated, the liquidating trustee will draft a final report that summarizes all of the transactions and distributions made. The liquidating trustee must also file a final report with the court prior to the discharge of the case.

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What is a “liquidating trustee” in a Chapter 11 bankruptcy?

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