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What is a bankruptcy examiner?

If your small business in Manchester is facing mounting debts, you may be left with little choice but to seek bankruptcy protection. Under a Chapter 7 case, the court will typically appoint a bankruptcy trustee who oftentimes will assume control of your company in order to prepare for the liquidation of assets to help resolve your debts. It is for this reason that companies looking to continue their operations following bankruptcy choose to instead file under Chapter 11. In such a case, the court may instead choose to appoint a bankruptcy examiner.

Rather than functioning as the manager of a bankruptcy case, the examiner’s role is to do just that: examine. He or she will perform the investigatory role of a trustee while the debtor-in-possession (you, in this case) retains control of the business. Examiners are not appointed in every Chapter 11 case, however one’s assistance may offer several benefits to yours. For example, an examiner may help by:

  •          Determining whether your business has a reasonable chance of reorganizing.
  •          Reducing the time and money required to investigate the details of your case.
  •          Offering a faster yet more thorough breakdown of your company’s financial situation due to not having to worry about managerial responsibilities.
  •          Eliminating the need to disrupt your operations during bankruptcy proceedings.
  •          Serving as an impartial third party in helping to mediate disputes.

The website for the United States Courts also points out that the court may choose to tailor your examiner’s role to closely fit that of a trustee short of managing the property of the bankruptcy estate. However, if parties of interest petition the court for the appointment of a trustee (perhaps because of fear of fraud), one who earlier served as examiner cannot fill that role. 

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