Trustee in bankruptcy

In Canada, a licensed insolvency trustee (LIT) is an individual or a corporation licensed by the official superintendent to hold in trust and, subsequently, to distribute a bankrupt's property among the creditors in accordance with the distribution scheme under the Bankruptcy and Insolvency Act (BIA).

The trustee must follow the procedures under the BIA, call creditors meetings and send the parties required notices of proceedings and documents.

To become registered as a trustee in bankruptcy (Russian: арбитражный управляющий; transliteration: arbitrazhnyy upravlyayushchiy), one must:[1] Person who has finished up all above-mentioned requirements is entered in the consolidated state registry of trustees in bankruptcy (Russian: сводный государственный реестр арбитражных управляющих) which is maintained by Federal Service for State Registration, Cadastre and Cartography.

In a Chapter 7 Bankruptcy ("Liquidation") the trustee gathers the debtor's non-exempt property, managing the funds from the sale of those assets, and then paying expenses and distributing the balance to the owed creditors.

The advantage of using a CRO is that the arrangement gives both the creditor and debtor more say over the future of the company than might be the case where a Chapter 11 bankruptcy trustee is appointed.