Definition:
A trustee is an individual, appointed by the court or by an individual, who is responsible for cashing in debts and securities, reinvesting the cash, to protect and preserve the trust property, and to ensure that the property is used only for the purposes for which it is intended.
A bankruptcy trustee is appointed by the bankruptcy court to oversee the bankruptcy of an individual or a business. The duties of the bankruptcy trustee include:
- Collecting and selling assets
- Paying off creditors with the assets in order of priority class
- In a Chapter 11 Reorganization, to operate the business so as to preserve the value of business assets
- To make periodic reports to the court on the progress of the bankruptcy.
A bankruptcy trustee, like other trustees, has a fiduciary duty to be responsible for the funds under his/her care.
