The bankruptcy and proposal business is going to have a new player – at least it will appear that way. Since 1920 Trustees have had the title “Trustee in Bankruptcy”. Effective April 1st, 2016, Trustees are going to have a new name. We will be called “Licensed Insolvency Trustees”.
Actually this change has been coming for some time. Over the past 25 years the insolvency business has changed considerably. Trustees, who used to primarily handle bankruptcies and some business receiverships, have gradually morphed into people who do a lot more than that.
On the corporate side we have become the go-to people for effective restructuring when a company gets into certain kinds of trouble, but does not want to close their doors. This might mean re-organizing via a corporate proposal, or the use of the Company Creditors Arrangement Act, or even informal restructuring and deal-making. In other words as expansive a menu of solutions as the imagination and skills of a Trustee can supply to try to save the business.
On the personal or human side, Trustees have become the go-to people to provide the kind of knowledge an insolvent individual needs to achieve financial rehabilitation.
An insolvent person is by definition a person who can no longer keep all his creditors happy all the time – can’t keep all his debt payments up to date. This is usually disastrous for that person. A Trustee is uniquely placed to be able to provide that person with the tools to solve his problems. These might involve a bankruptcy or a consumer proposal, or a more informal option. But the real solution will be that the insolvent person will have the chance to re-take control over their affairs. Though a lot of work will still have to be done, at least they can be in charge of doing it.
So the new title, which will be in use immediately, will be Licensed Insolvency Trustee.
Licensed – Because a Trustee must be licensed by the Federal Government, through the Office of The Superintendent of Bankruptcy, to have the authority to perform his duties.
Insolvency – Because the problems facing people today are not those of the past and the solutions and consequences have to be seen in a much more contemporary context. We are no longer necessarily talking about bankruptcy. There is much more to what we do.
Trustee – That stays because it properly reflects what we are – people who act in trust for others. Unlike a lawyer or other professional a Trustee does not work for only one side. A Trustee acts impartially in the interests of all the parties involved. This operates strongly to maintain public confidence in the legal insolvency process.
Hooray for the move forward!