The Judicial Administrator is a very important figure in insolvency and recovery proceedings, both for natural and legal persons.
However, the type of roles and duties are different depending on the proceeding.
In the context of insolvency proceedings, the Administrator is called an “Insolvency Administrator”, and his main functions are administering the insolvency estate, namely, liquidate its assets and rate the proceeds to the creditors.
Specifically, in the insolvency proceedings of a natural person, and within the scope of the discharge of the remaining liabilities, the Administrator is called “Fiduciary”, precisely because he assumes this role.
There, the Fiduciary is responsible for supervising and ensuring compliance with the obligations to which the debtor is bound within the scope of the discharge of the remaining liabilities, such as the monthly assignment of income, in order for the debtor to be granted, at the end of the assignment period, the discharge of his debts. The Fiduciary is also responsible for distributing the proceeds of that assignment of income to the creditors.
In the recovery of natural persons (PEAP) and legal persons (PER), the Administrator is called “Provisional Administrator” and does not assume liquidation functions, since this type of process is of a negotiating nature, in which the debtor and creditors are expected to negotiate the payment of the debtor’s debts, without the need to liquidate the debtor’s assets.
The Administrator assumes the role of a convergent entity between the parties, assisting them during negotiations and overseeing compliance with the legal rules that are applicable, aiming to achieve the approval and subsequent ratification of the debtor’s reorganization plan.
The Administrators are appointed by the Court, although the law provides that the debtor may propose the appointment of a specific Administrator – however, the Court is not obliged to follow this suggestion.
When compling with their duties, the Administrators shall act independently and impartially.
The Court can remove the Administrator and replace him if there is just cause to do so. This would be the case, for example, if the Administrator unjustifiably failed to provide the liquidation accounts, or used the proceeds of the liquidation for his own benefit. The law provides for the civil, disciplinary and fiscal liability of Administrators for damage that may be caused to the debtor and creditors in the performance of the Administrators’ duties.
