519-646-2222Who does your LIT (Licensed Insolvency Trustee) work for?
We have discussed this issue in the past but it is worth reiterating.
To be fair the workplace for Licensed Insolvency Trustees is a complex place and many LITs get confused about who really is the client. At times Trustees are engaged to work for secured creditors and some dos most of their work in this area – no wonder they view the banks as their clients. By contrast, some
trustees only do consumer insolvencies and they view the debtor as their client.
Trustees are answerable to the debtors, the creditors, the courts and the Office of the Superintendent of Bankruptcy – no wonder they are confused!
Since their are more consumer insolvencies than corporate ones the view that debtors are the clients seems to be the most prevalent. However, the confusion about who is being represented allows outsiders to capitalise and make claims that are manifestly untrue such as the “trustee always represents the creditors”.
The reality is that the trustee is working for a privately owned business and is licensed to administer a very specific piece of legislation with strict rules, directives and a complex regulatory framework. The trustee must try to make a profit for the company for which s/he works within the context of that matrix. There are in fact times when trustee represent the interests of each of the concerned parties, sometimes all at the same time on the same issue.
Are you confused yet? Try being a trustee and having to wear many hats all at
the same time.