Creditors dismissing the trustee they appointed, and appointing a new one

nothingimportant55

Hi all!

I am currently being sued, in a very nasty litigation. It's been going on for years. In January, I had no choice but to go bankrupt and liquidate my limited company. The people who were suing me, my major creditors, immediately appointed my liquidator as my trustee in personal bankruptcy.

I have cooperated with him for 3 months, everything was going fine, suddenly .. my creditors decided that there was a conflict of interest with him being both my liquidator and trustee, so they have forced him to resign. A creditors meeting has been called for next week and they plan on appointing a new trustee for me. Apart from the fact that I will now need to go through everything again with a new trustee, 3 months in, there is more to the story ..

They have initiated a whole new round of court proceedings against me, as part of the same case, and they have now dragged my cousin into it. My cousin was already in touch with my trustee as I had given him money in the past year and the trustee had asked for it back.

It's clear to me that they are appointing this new trustee so that they can use him as a weapon against me and so they can get information about my personal affairs so that they can use them against me and my cousin, in the litigation.

I believe that this is a massive conflict of interest. I'm happy for a new trustee to be appointed by another creditor, or by the OR, but I don't think it's right that the people who are still suing me can appoint the trustee.

Also, I think it's questionable that they can appoint a trustee, force him to resign months later, and appoint a new one. Surely this is harassment of some kind?

I have tried speaking to my OR, no help, I have phoned countless helplines, nothing, and I can't complain to the senior official receiver about a trustee who hasn't been appointed yet.

It seems that my existing trustee, and my soon-to-be-new trustee are able to just sort this all out amongst themselves, and I have no say.

Does anyone know if there's a way for me to stop it or to get an independent person involved who can decide if it's fair or not?

Many many thanks for any of your thoughts!!!

Steve

Decoctor

I think you need to speak to a solicitor. But you need to distinguish pre-existing litigation from litigation brought by a Trustee in Bankruptcy. Litigation against you prior to your bankruptcy will be stopped under the Rules of Court. But the Trustee can commence separate litigation against you on behalf of creditors in respect of any bankruptcy misconduct either before, during or after the bankruptcy.

Johno100

nothingimportant55 wrote: »

I believe that this is a massive conflict of interest. I'm happy for a new trustee to be appointed by another creditor, or by the OR, but I don't think it's right that the people who are still suing me can appoint the trustee.

Nope, it's up to your creditors to pick who they want as your trustee and if this 'nasty' creditor carries the vote then that's how the cookie crumbles.

nothingimportant55 wrote: »

Also, I think it's questionable that they can appoint a trustee, force him to resign months later, and appoint a new one. Surely this is harassment of some kind?

No not harassment, and I'm afraid as a bankrupt you are not in a position to challenge this in court even if it was.

nothingimportant55 wrote: »

I have tried speaking to my OR, no help, I have phoned countless helplines, nothing, and I can't complain to the senior official receiver about a trustee who hasn't been appointed yet.

The OR is out of the equation once a trustee in bankruptcy is appointed, he/she has no powers to intervene, even if they wanted to. If you have a complaint against your present or future trustee then you would need to take that to their licencing body.

nothingimportant55 wrote: »

It seems that my existing trustee, and my soon-to-be-new trustee are able to just sort this all out amongst themselves, and I have no say.

No they have to follow detailed provisions in the Insolvency Act and Rules regarding the summoning of meetings, voting, their release from office and handover of your case. You can challenge any of these points at court if you think the rules haven't been followed correctly.

nothingimportant55

Hi Decotor,

Thanks for your reply. It's the pre-existing litigation. My trustee recommended to the court that they discharge the case, the court decided not to. They sued me personally, and then after I withdrew from the trial for financial reasons (hundreds of thousands in costs) and declared myself bankrupt, they somehow managed to change the original citation and are now targeting the limited company that was never part of the original litigation. It's a long story but sadly looks like I don't have any means of stopping them from continuing to attack me according to Johno100 (thanks for your comments, I appreciate the input), even though I have nothing left and there's nothing for anyone to gain. I don't even have representation now, but still the case trundles on without even me being there.

I just find it so unfair that they wont let me move on. I cooperated fully with the trustee, the liquidator, the OR in my original interview .. then BOOM .. they appoint a new one and I'm supposed to do it all again, and I know he'll just be a lacky of theirs out for blood. It's turned into a petty vendetta. I thought bankruptcy was designed to protect you as well as regain as much of your assets as possible, not as a tool for people to drive you to suicide.

Anyway, thanks all!