United Western Bancorp Inc (fka UWBKQ)

[imawswami]

How does a trustee get paid again?

"Once trustees are appointed to the panel, chapter 7 cases generally are assigned through a blind rotation process. The chapter 7 trustee collects assets of the debtor that are not exempt under the Bankruptcy Code, liquidates the assets, and distributes the proceeds to creditors."

"Who Pays the Bankruptcy Trustee? In a Chapter 7 case, the trustee is paid through a percentage of the liquidation proceeds used to repay your creditors. Typically, this fee can range from 3% to 25%. If there are no assets that are being sold, then the trustee does not make any money."

https://www.justice.gov/ust/private-trustee-information#:~:text=Once%20trustees%20are%20appointed%20to,distributes%20the%20proceeds%20to%20creditors.

https://www.wsbankruptcylaw.com/personal-bankruptcy/bankruptcy-trustees/#:~:text=Who%20Pays%20the%20Bankruptcy%20Trustee,does%20not%20make%20any%20money.

I am no lawyer, but if creditor payouts are what generate income for the Trustee, then the trustee got nothing for Wilmington Trust, since WT is not a creditor. Also, the above reads -assets must be liquidated by the ......trustee (called collections) and monies collected from such sale are used to repay creditors. It is from this transaction that the Trustee gets a %, which can be negotiable for larger BK's.

It would not make sense for the Trustee to liquidate the debtors own assets, then hand the full proceeds back to the debtor, less the trustee cut!? Not going to happen.

Further, any NOL's sale to a bank holding company (such as FCNCA), assuming it happened (which i do), requires the FDIC full participation (thus blunting the trustee as liquidating agent of sorts) and would be exempt from trustee fee calculations.

I am not a lawyer, but the above is a personal take on the matter.