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

A “liquidating trustee” in a Chapter 11 bankruptcy is a person that is appointed by the court to manage a business’s ability to pay off its debts. The liquidating trustee is usually the same individual who filed for bankruptcy and is in charge of reorganizing the business’s financial affairs. Under Utah’s bankruptcy laws, the liquidating trustee has the authority to take control of the business’s assets, including tangible and intangible property. They may manage the business’s finances, investigate the business’s financial condition, negotiate with creditors, bring in experts to analyze the business’s financial condition, and make decisions regarding the best course of action to end the business’s financial crisis. The liquidating trustee is also in charge of liquidating any assets of the business that are not necessary to running the business. This may include everything from the business’s inventory, physical property, and intellectual property to stocks, bonds, and cash. This is the main way that creditors are able to receive any payment for the debt that the business owes. The liquidating trustee has to make sure that the assets are sold for fair market value. The liquidating trustee is also responsible for distributing any remaining funds to the creditors and other parties that are owed money by the business. This payment must be made according to the priorities established in the Utah bankruptcy code. In some cases, the liquidating trustee may also have the ability to negotiate with creditors to reduce the amount of debt owed by the business.

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

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