Today 07/30/2010
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Bankruptcy Ontario: Free Information about Bankruptcy in Ontario

trustee and consumer proposal

Question: Can the trustee influence the creditors acceptance or rejection of a consumer proposal ??? or must they stay out of the process?

Answer: Legally, the trustee is not permitted to “solicit” votes in a consumer proposal. The trustee, technically the Administrator of the consumer proposal, is required to act in a manner that is fair to all parties. It would not be fair for an Administrator to call up a creditor that they think might vote in favour to solicit their vote, while not contacting a creditor that may be more likely to reject the proposal.

That being said, the Administrator of the consumer proposal is permitted to answer questions, so if a creditor calls asking for information, the Administrator can discuss the proposal. In addition, the Administrator does submit a report to the creditors, Form 48, indicating that they believe the proposal is “fair and reasonable” to the creditors and the debtor, so in that sense it could be argued that the Administrator is influencing the acceptance of the proposal.

Your trustee can provide you with more information if you require a more detailed explanation.

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