If physical or the legal entity has such serious financial problems that there is no other choice but to declare bankruptcy, you should be prepared for a temporary manager to be appointed. Most future bankrupts have little idea who a temporary manager is and what his functions are, but it is impossible to do without this specialist. It is especially important if there is still hope of restoring the financial well-being of the debtor. As practice proves, there are quite a lot of situations where the services of a manager bring positive dynamics. In addition, this specialist observes and renders a verdict of financial insolvency.
How is a temporary manager appointed?
A temporary manager is necessarily an individual who is appointed to oversee and manage the affairs of the company against which the lawsuit is being conducted. bankruptcy proceedings. He is appointed by the arbitration court, and the task of this specialist is to supervise all parties to the financial situation. debtor relations, monitor the activities of the company and represent its interests as an intermediary. The specialist’s main task is to preserve the company’s property as much as possible, which in the future will be used to pay off debts.
Perhaps the anti-crisis manager will be able to organize the work in such a way that arbitration proceedings will not be required. But if the debt is too large, perhaps all the efforts of the interim manager will be useless.
The director of the enterprise, who previously managed the affairs, is relieved of his duties. Property and financial affairs are transferred to the management of a court-appointed specialist. His appointment takes place in parallel with the consideration of the case in court. This usually takes up to ten days.
The assignment goes like this:
- The candidacy of a manager can be proposed by creditors interested in the case to whom the debtor company owes funds. But there may not be such proposals.
- The court selects a candidate arbitrarily by studying the list of registered managers.
- A request is submitted to the federation. bankruptcy institution where a list of candidates is formed.
If you use the last option for selecting a specialist, you may have to wait up to a week for the list to be generated.
Having chosen a candidate, the manager is appointed to the position. How long he will occupy it depends on the individual characteristics of the case. Officially, his powers are terminated as soon as the legal entity is declared bankrupt or the case against it is closed.
Appointment of a temporary manager at the observation stage
The mechanism for appointing a temporary administrator is not defined in detail by law, which is why controversial situations often arise. Thus, it must begin its work simultaneously with the start of the observation procedure. But it is not entirely clear who should apply for his appointment: at this stage, not all creditors are aware of the beginning of the bankruptcy procedure, and the debtor is prohibited from indicating the candidacy of the manager.
Article 59 of the bankruptcy legislation provides for the following options for appointing a temporary manager:
- from among the candidates/SROs proposed by the creditors of the legal entity;
- from candidates registered with the court as managers, in the absence of proposals.
Since all creditors are not yet aware of the start of the insolvency procedure, any creditor, even those with small claims, can file a petition. As a result, the temporary manager often begins to act in the interests of the creditor who applied for his appointment. This in practice leads to abuse.
For your information
The observation procedure can last from three to five months. Accordingly, this is exactly the duration of work of this arbitration manager. It is therefore very important to appoint a manager as quickly as possible.
The following requirements apply to the candidacy of a temporary manager:
- no criminal record;
- non-participation in the management of the debtor company;
- non-bias in favor of the debtor or creditors.
The temporary manager begins to perform his duties until:
- appointment of a temporary/administrative manager;
- declaring the debtor bankrupt and moving to the stage of bankruptcy proceedings;
- a court decision approving a settlement agreement between creditors and the debtor;
- the arbitration decision to refuse to declare the debtor bankrupt.
What insolvency procedure does he carry out?
Debtors often undergo several procedures before being declared bankrupt, and interim managers are responsible for some of them. But confusion often arises when analyzing the question of what bankruptcy procedure is carried out by temporary managers.
This specialist begins work at the monitoring stage, which actually starts after the creditors submit the application to the Arb. court. Observation has the following objectives:
- organize a meeting of creditors;
- draw up a list of requirements for the debtor;
- analyze and evaluate financial activity of the debtor company;
- find ways to preserve company property.
All this is done by the manager, who, in addition, controls the continuing operation of the company. The managerial function passes into the hands of the representative, and the activities of the actual management are severely limited.
When the observation ends, the manager draws up a report on the work done. This report is transmitted to Arb. the court, which, on its basis, decides whether to continue bankruptcy or whether the company is declared solvent and the procedure is terminated.
Rights of the temporary manager
The powers of a temporary bankruptcy manager include the following professional rights:
- Send petitions to the court to declare transactions of former company managers invalid, provided that these transactions were made before bankruptcy and contradict the Federal Law “On Insolvency”. These transactions are canceled and declared void/fictitious/invalid. The reason for their cancellation is that they worsened the financial situation. the state of the company.
- Monitor the legality of the claims of creditors who are trying to demand from the debtor something that is not provided for by law. Participate in meetings of the Arb. court to assess the legality of the demands put forward.
- Intervene in the conclusion of certain transactions of the company. Among such transactions one can highlight those related to property, real estate and finance, some of which constitute more than 10% of the company’s capital. The manager can also oversee issues of credits, loans, and other financial guarantees. Engaged in attracting guarantors and assignment agreements. If a transaction is alarming, the manager may petition to prohibit it.
- Request any information from managers, including those that relate to trade secrets or are prohibited. Sometimes management refuses to provide the required data; a specialist can forcefully obtain it by going to court. If documents, etc. were destroyed, the manager can request them from the counterparty, therefore an attempt to hide any information is useless.
- Demand that additional measures be taken to preserve the debtor’s property pending further proceedings.
- Prohibit a settlement agreement if it is illegal.
- Completely remove the company's management from business affairs.
The manager's rights are intended to prevent further deterioration of the company's fortunes while the audit process is underway.
Interim manager's remuneration
The temporary manager receives remuneration for the work done. The amount of the fixed payment is approved by the court and is 30,000 rubles. per month. It can be increased at the expense of creditors if they submit a corresponding application to the court.
Additionally, the manager may be paid interest on the book value of the debtor's assets. Depending on the value of the assets, interest payments range from 10,000 to 60,000 rubles.
Often, during the monitoring process, the temporary manager has to spend his own money on publishing announcements in the EFRSB, postage costs, and protecting the debtor’s property. These funds are reimbursed from the debtor's property.
Important! Expenses for the monitoring procedure must be financially justified and supported by payment documents. For convenience, the temporary manager prepares advance reports with checks and receipts attached.
Responsibilities of the temporary manager
The duties of a temporary manager include all measures aimed at maintaining the financial activity of the debtor company. But in addition to this, the manager’s responsibilities include:
- find reasons for non-fulfillment of debt obligations;
- notify creditors of the commencement of the case;
- determine the liquidity of the enterprise;
- find all the creditors to whom the bankrupt borrower owes money;
- estimate the market price of the debtor company;
- predict the prospects and timing of the return of solvency (if possible);
- create and hold a meeting of creditors;
- draw up an action plan to return the company to solvency.
Also, temporary managers are required to find features of fictitious bankruptcy, if such signs exist:
- Finnish reports were edited or falsified;
- documents were destroyed;
- information about property was concealed;
- deb. debt was not controlled;
- drawing up deliberately unprofitable contracts;
- there is a financial opportunity, but debt obligations are ignored.
But this evidence is indirect and requires confirmation. The company's management should not interfere with the manager. Creditors must present their rights within a month after the opening of the case. And the debtor has a week to challenge everything.
The role of a temporary manager in bankruptcy
The temporary manager has at his disposal all the information related to the financial and economic activities of the facility
All claims of creditors included in the register can be reviewed by the manager. If any of the demands are inconvenient, he may object to them.
All transactions of the debtor during the observation period can be appealed by the temporary manager.
All major transactions of the debtor during the bankruptcy period cannot be carried out by the debtor without the permission of the administrator.
One of the most important duties of a temporary manager is to report to law enforcement agencies. The purpose of the report is to identify signs of a fictitious bankruptcy of the debtor. This offense consists of both active actions and inaction of the debtor. It is possible that the report on the fictitious activities of the enterprise may contain erroneous data.
The temporary manager has the right to veto the first meeting of the debtor's creditors.
The manager, at his subjective discretion, may object to the conclusion of a settlement agreement between the participants.
At the initiative of the manager, the terms of bankruptcy may be greatly delayed.
Whether the authority is enough is for you to judge.
Responsibility of the temporary manager
The bankruptcy manager has not only rights and obligations. He is responsible in the bankruptcy case he is leading. Liability arises if a professional fails to perform his duties or deliberately does them poorly. In this case, the manager will be removed. If the manager is removed, then even if it is appealed, there will be no reinstatement. That is why professionals try to do their work in such a way that there is no doubt about their competence.
Measures that can be applied to a specialist:
- property liability;
- compensation for losses received by the debtor/creditors due to the manager;
- disqualification with a mark in the Federal Register;
- exclusion from SRO;
- administrative/criminal liability if the damage is particularly large.
Each measure is effective in its own way and helps control the professional actions of the manager. As soon as a violation is recorded, you need to report it to the court.
Responsibility of a temporary manager in bankruptcy proceedings
The responsibility of the temporary manager for failure to perform/improper performance of his professional duties may be expressed in his removal. This procedure is carried out at the initiative of the participants in the bankruptcy case. After the relevant determination is made (even if it is appealed), the manager is not subject to reinstatement.
The legislation also provides for other liability measures that may be applied to the manager:
- His exclusion from the SRO, which is designed to monitor the professional level of its members.
- Application of liability measures in the form of disqualification with publication of the corresponding mark in the Federal Register.
- Compensation for losses caused to the debtor and creditors.
- Additional measures of property liability.
- Criminal and administrative liability for causing damage on a large scale.
Interim Manager Action Plan
The temporary manager must work according to a plan that he draws up independently. This is a list of events that he will have to prepare and carry out. Since this specialist does not have much time to work, it is important to schedule each event correctly. Among the tasks that must be included in the plan are usually indicated:
- Conducting an analysis of all accounting reports for three years before the incident.
- During the same period, it is necessary to analyze the transactions of the enterprise. But taking into account the market conditions under which these transactions were carried out, and not the current situation. Perhaps the deal was profitable at the time, but not now.
- Analyze the circle of legal counterparties. faces. This is necessary in order to find offshore companies, shell companies, and unreliable companies among them.
- Conduct an inventory and assessment of legal assets. faces.
- Assess the legality of the claims put forward by creditors. They are usually received regularly, so you need to carefully check their relevance and legality.
When the final report is written, it also includes a small plan of action for the future. For this purpose, information collected based on the analysis performed is used.
Result and report
The interim manager must provide a report on the work he has done with the debtor. The report is submitted to the arbitration court so that, based on the results of the study, it can draw the correct conclusion about the debtor and decide whether he can become bankrupt.
The document contains the following information:
- on those activities that were carried out to preserve assets, property and other valuables remaining with the company;
- how the search for creditors in the case under consideration was carried out;
- submit reports on petitions/statements received by the manager during the consideration of the case.
The reports must include all information that may affect the consideration of the case and that has become known to the manager. In this case, you must provide copies of documents related to the report. For example, you can attach:
- Fin. documentation. They demonstrate the well-being of the company. To confirm disadvantage, each aspect of the company’s activities and their profitability are analyzed. For example, investments and households are assessed. areas of work, etc. In general, a thorough analysis of each profitable and loss-making area of work is needed. After all, perhaps it was some direction that caused the problem.
- Conclusion – bankruptcy is intentional or not. Perhaps the management itself provoked the financial crisis. trouble, but it needs to be proven. The report identifies the evidence justifying the bankruptcy. Confirmation documents are also attached.
- Creditor requirements. Each of them has its own list of requirements, which are not always legitimate. Only those requirements that are practical are included in the list.
- Minutes of meetings (last and first).
- Conclusion: is it possible to restore solvency?
You also need to add individually selected papers for each case.
Rights and obligations of the temporary manager
The arbitration manager has the right:
- submit to the arbitration court a demand to recognize a transaction as invalid, a demand to apply the consequences of the invalidity of void transactions that were concluded or executed by the debtor in violation of the requirements of the Federal Bankruptcy Law;
- object to the claims of creditors in cases provided for by law, including applications for missing the statute of limitations;
- participate in court hearings of the arbitration court to consider the validity of the debtor’s objections to the creditor’s claims;
- petition the arbitration court to take additional measures to ensure the safety of the debtor’s property, prohibit transactions without the consent of the temporary manager;
- petition the arbitration court to remove the debtor manager from office;
- gain access to any information and documents that relate to the activities of the debtor;
- exercise other powers established by the Federal Bankruptcy Law.
The debtor is obliged to provide the temporary manager with any information at his request that relates to the debtor’s activities.
Within 7 days from the date of receipt of the arbitration manager’s request, all information about the debtor, about his property and property rights that belong to him, as well as his obligations, must be provided to him free of charge by both individuals and legal entities, government agencies, authorities local government.
Expenses and remuneration
The bankruptcy trustee must receive compensation, because this is his job. The manager also incurs financial expenses that must be compensated. The expenses could be anything. The main thing is that the expenses are justified, otherwise they will not be returned.
It is advisable to document expenses. That is, you need to keep all receipts that record expenses incurred by the manager.
Funds will be refunded if no suspension occurs. If a specialist tarnishes his reputation, his expenses will become his problem. Typically, the debtor compensates the money. They will be collected from his property if the fin. the situation is so bad that alternative payment is not possible. Expenses that may be covered include:
- publications in the Fed. register;
- legal costs;
- salaries of other attracted specialists;
- expenses for creditor meetings.
Expenses are reimbursed, but in addition to them, the manager receives a salary. It consists of several amounts. The first is salary. It is appointed by the state in a fixed amount (30 thousand rubles/month). The second amount is interest, and it is not fixed, unlike the state salary.
The debtor pays this money. They are calculated without a queue and only after that are paid to creditors. The fixed salary can be increased through the court if creditors want it.
Calculating % is more complicated. They are calculated depending on the amount of assets of the future bankrupt:
- less than 250 thousand – 4%;
- from 250 thousand to million – 1% and 10 thousand rubles;
- from 1 million – 0.5% and 17.5 thousand;
- from 3 million – 0.2% and 27 thousand rubles;
- from 10 million – 0.1% and 41.5 thousand;
- from 100 million – 0.05% and 131.5 thousand;
- from 300 million – 0.01% and 231.5 thousand;
- from 1 billion – 0.001% and 301.5 thousand.
To correctly estimate the size of assets, accounting and the latest reports are used.
Temporary manager's expenses
In addition to remuneration, the temporary manager can count on compensation for expenses incurred during the supervision procedure. Moreover, such expenditure transactions must be economically justified and documented. Compensation is due to the manager if he was not removed from the business for improper performance of his duties.
The expenses incurred by the arbitration manager during the bankruptcy procedure are recovered from the debtor's funds. These may include costs for publishing information in the Federal Register, paying for the services of hired specialists, legal costs, organizing creditor meetings, etc.
Appeal against the actions of the temporary manager
The actions of even the best specialists can be wrong. Managers are also prone to making mistakes, but their work is too responsible for that. If the temporary manager is slack, his decision can be appealed:
- petition;
- complaint;
- statement.
They are filed with the court, prosecutor's office or regulatory authorities, depending on the severity of the offense. But appealing is a difficult task that requires a professional approach.
Victims need to hire a specialist to represent their interests. Only a professional will take into account the laws, judicial practice, find evidence and formalize everything correctly. If successful, suspension or more significant punishment, including arrest, will follow.
Removal from office
The temporary manager may be removed. To do this, his guilt must be proven using irrefutable evidence that the court will accept. This evidence is:
- creditors did not meet/the meeting was late;
- Finnish the analysis was carried out with a violation (intentional/unconscious);
- the debtor's property was not preserved due to the temporary manager;
- the specialist did not include creditors;
- negligently carried out inventory;
- falsification of information in reports;
- unprofessional plan for working with the company.
They can be removed if the manager meets the following criteria:
- have a criminal record;
- associated with the debtor company;
- interested in the affairs of the debtor or creditor.
Also, the manager will be removed if the case is terminated earlier. But this will not affect his career.
Why do you need a manager when an individual goes bankrupt?
The financial manager is an obligatory participant in the procedure by which a person is declared insolvent. Thanks to the participation of a professional in the process, it is possible to:
- Find out the financial situation of the debtor.
- Identify all potential participants in the process (creditors).
- Have a connection between creditors and debtor.
While participating in the case, he performs the following functions:
- analyzes the financial condition of the obligated person;
- carries out the development of measures aimed at restoring solvency;
- maintains a register of all creditors of a person;
- ensures the safety of property, maintains accounting records of the person;
- conducts an analysis of the possibility of special bankruptcy;
- takes measures to ensure the functioning of the debtor's payment system in bankruptcy mode.
