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

A liquidating trustee is an individual or entity appointed by the court during a Chapter 11 bankruptcy in Washington. This trustee is responsible for deciding how to liquidate the assets of the debtor in the case and distributing the proceeds to creditors. The court must approve the appointment of the liquidating trustee and the trustee must meet certain qualifications. Some of these qualifications include that the trustee has knowledge of bankruptcy law and experience in handling liquidations. The trustee must also be independent from the business and the creditors of the business. The liquidating trustee is tasked with the responsibility of selling off the debtor’s assets and distributing the proceeds to creditors. This includes going through the business’s inventory and finding buyers for it. The liquidating trustee also has the responsibility to review the debtor’s finances and determine the feasibility of reorganizing the business. The liquidating trustee also has the power to resolve disputes between creditors. This includes determining priorities between creditors and trying to satisfy as many of them as possible while ensuring fairness and equality. In summary, the liquidating trustee is an important role in a Chapter 11 bankruptcy in Washington. The trustee’s primary responsibilities are to liquidate assets, review finances, and resolve disputes between creditors.

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

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