The liability of a bankruptcy trustee concerns a very practical question: if the management of the procedure has reduced or compromised the assets intended for creditors, is it possible to obtain protection? I will explain the main rules, why a disappointing financial result alone is not enough, and what the difference is between challenging a single act, requesting the replacement of the trustee, and initiating a liability action.
Today, the law refers to the trustee in judicial liquidation, while the expression "bankruptcy trustee" remains common for proceedings governed by prior legislation. We will examine together which facts can give rise to liability, who can take action during the procedure, and why the opening date of the procedure changes the applicable discipline.
When the trustee can be held liable for damages
The trustee is not liable for every loss suffered by the procedure. Liability requires that the trustee has violated a duty of their office and that financial loss has resulted from that conduct. Article 136 of the Crisis Code requires the trustee to fulfill the duties provided by law and by the liquidation program approved with the diligence required by the nature of the assignment. The liquidation program is the document that identifies, among other things, the methods provided for realizing assets and managing the activities of the procedure. Article 136 of the Crisis Code
Conduct matters, not just the outcome. A sale that produces proceeds lower than expected does not automatically prove wrongdoing: the actual value of the asset, market trends, the costs necessary to preserve it, or the presence of encumbrances may have an impact. The situation changes if, for example, the act is carried out without the required power or authorization, in contrast with the approved program, or without the professional care that the situation demanded.
The loss must be concrete and linked to the contested fact. It is not sufficient to point out management deemed unsatisfactory in general terms. It is necessary to identify the transaction or omission, the duty violated, and the prejudice that followed for the assets of the procedure. In other words, a distinction must be made between a choice that did not yield the hoped-for result and management that produced an avoidable loss precisely due to the trustee's breach.
The assets of the procedure do not coincide with the single claim
The harm to the body of creditors is collective. If the trustee's behavior reduces the available active assets, the prejudice concerns all admitted creditors or those intended to compete in the procedure. For this reason, any compensation, when due, is acquired by the assets of the procedure and distributed according to the rules of competition, respecting priority rights and distributions. It does not automatically become a sum assigned in full to the creditor who reported the problem.
A personal injury follows a different logic. A creditor claiming their own damage, separate from the decrease in common assets, must first clarify whether the prejudice truly derives from an individual relationship and not from the loss suffered by the mass. This distinction is decisive: the reduction in the possibility of payment that indiscriminately affects all creditors cannot be transformed into personal damage.
Standing prevents overlapping initiatives. Case law cited by the Court of Cassation, with reference to the previous bankruptcy discipline, highlights that the action regarding damage to the concourse assets generally belongs to the body of creditors and not to the individual participant. This orientation helps to understand why, during the procedure, the compensation initiative is entrusted to the body representing the common interest. Civil Review of the Court of Cassation on the relationship between trustee and body of creditors
Immediately challenging an act or omission
The complaint serves to remove a violation of law. Article 133 of the Crisis Code allows the creditors' committee, the debtor, and any other interested party to file a complaint with the delegated judge against the management acts and omissions of the trustee. The remedy concerns the regularity of the act or omission; if the complaint is upheld, the trustee must comply with the decision of the delegated judge. Complaint against acts and omissions of the trustee, Article 133
The ordinary term is eight days from knowledge of the act. For an omission, the term runs from the deadline indicated in the formal notice to perform: that is, from a formal request identifying what the trustee must do and the time limit assigned. This rule requires attention, because the complaint cannot be treated as a generic contestation to be raised at any time.
The complaint does not replace compensation. It can be a useful tool to prevent an irregular act from producing further effects or to obtain a decision on the contested omission. However, it does not equate alone to an order to pay damages. If the damage has already occurred, civil liability requires a separate examination of the conduct, the prejudice, and the nexus between the two.
Revocation, replacement, and liability action
Revocation and compensation are different remedies. The court may revoke the trustee at any time, upon proposal of the delegated judge, at the request of the creditors' committee, or ex officio. Revocation serves to interrupt the assignment when reasons provided by law occur; it does not automatically ascertain damage nor establish, for that reason alone, a compensation obligation. Revocation of the trustee, Article 134 of the Crisis Code
The debtor and admitted creditors can request replacement to avoid conflicts of interest. Current Article 135 does not require a majority of admitted claims. Applicants must explain the conflict to the court, which assesses their reasons and checks that the applicant creditors are not themselves conflicted. A criticism of the trustee’s conduct therefore needs the appropriate remedy: a complaint against an unlawful act, removal from office, and replacement for a conflict of interest are not interchangeable. Article 135 of the Crisis Code, current text
The compensation action during the procedure belongs to the new trustee. Article 136, paragraph 3, establishes that the liability action against the revoked or replaced trustee is proposed by the succeeding trustee, upon authorization of the delegated judge. This rule protects the unitary character of protection: the compensation claim is requested in the interest of the procedure, not as an individual initiative aimed at obtaining a separate advantage.
The practical sequence depends on the problem that has emerged. If it is necessary to stop or correct a recent act, the complaint may take on relevance. If the issue concerns the trustee's permanence in office, revocation or replacement come into consideration. If, after cessation from office, a violation of duties and damage to the mass emerge, the liability action is the tool provided during judicial liquidation. Confusing these levels risks wasting time or useful deadlines.
What facts and documents make the contestation verifiable
The liquidation program indicates the operational parameter. If the charge concerns a sale, a waiver of an action, or the management of an asset, it is essential to understand whether the operation was provided for by the program, whether it respected its conditions, and whether further authorizations were necessary. Acts of the delegated judge or the creditors' committee can also have an impact: an authorization does not erase every possible liability, but it changes the context in which conduct must be evaluated.
The chronology clarifies whether an omission exists. To contest a delay, it is necessary to distinguish between an activity left at a standstill without reason and a phase that required checks, authorizations, publicity, or the resolution of disputes. Communications received from the procedure, filed provisions, reports, and acts showing which decision was required and when are useful. Article 136 also provides for a computer registry of operations, consultable by the delegated judge and members of the creditors' committee. Registry of operations and duties of the trustee, Article 136
The final accounting is not a formula that solves everything. The cessation of the trustee entails the rendering of accounts of management, which may be accompanied by observations and objections from the succeeding trustee. Accounting is important to reconstruct revenues, expenses, and operations, but any liability still requires linking accounting entries and management acts to the claimed damage.
Why the opening date of the procedure changes the rules
Since July 15, 2022, the Crisis Code has been in operation, using the expression "judicial liquidation" instead of "bankruptcy" for new proceedings. The entry into force of the Code was set at that date. Entry into force of the Crisis Code from July 15, 2022
Pending bankruptcies remain regulated by the previous discipline. The transitional provision establishes that appeals filed before the entry into force and consequent proceedings are defined according to Royal Decree No. 267 of 1942. Therefore, facing a procedure still formally called "bankruptcy", the rules of judicial liquidation must not be applied automatically: the opening decree and the date of the appeal are data points that change the regulatory reference. Transitional discipline of the Crisis Code, Article 390
The closure of the procedure requires further attention. The rule of Article 136, paragraph 3, expressly concerns the action proposed during judicial liquidation by the succeeding trustee. If the procedure is already closed, or if it is an old bankruptcy, it is not prudent to extend that provision without verifying the acts of the procedure, the transitional regime, and the concrete position of those intending to take action.
Frequently Asked Questions
Can I personally request compensation for damages caused to the procedure?
Not automatically. If the damage concerns common assets intended for creditors, during judicial liquidation the action against the revoked or replaced trustee is proposed by the new trustee with the authorization of the delegated judge. The individual creditor must therefore distinguish damage to the mass from any personal damage, which requires different prerequisites.
Can I challenge an act of the trustee even if I am not on the creditors' committee?
Yes, the complaint is also open to any other interested party. Article 133 of the Crisis Code allows contesting management acts and omissions for violation of law. For acts, the term is eight days from knowledge; for omissions, the eight days run from expiry of the deadline stated in the formal notice to perform.
Does the revocation of the trustee give me the right to compensation?
No, these are two distinct issues. Revocation ends the trustee's assignment, but does not ascertain on its own either the existence of damage or its amount. For civil liability, it is necessary to demonstrate a violation of office duties, damage to the assets of the procedure, and the nexus between that violation and the prejudice.
Can I request the replacement of the trustee with other creditors?
Yes, admitted creditors can request replacement to avoid conflicts of interest, without a majority threshold. The debtor or an individual admitted creditor can also apply. The request must explain the conflict to the court, which also checks whether applicant creditors are themselves conflicted. Delays or disputed decisions without a conflict instead call for consideration of a complaint or removal under their respective requirements.
Do the same rules apply to an old bankruptcy?
Not always. Pending proceedings and appeals filed before the entry into force of the Crisis Code remain governed by the previous bankruptcy law. Before identifying remedies, terms, and parties with standing, it is therefore necessary to check the filing date of the appeal and the provision that opened the procedure.