How much does a Trustee earn?

Receiver's remuneration in economic bankruptcy

The remuneration of the trustee in the event of commercial bankruptcy is one of the significant costs for those deciding to file an application to open bankruptcy proceedings. So, what remuneration can the trustee in bankruptcy proceedings count on?

Read the text below and find the answers to the questions:

• Who is the trustee and what is his role in bankruptcy proceedings?
• What does the trustee’s remuneration depend on?
• Who determines and when how much the bankruptcy trustee earns?
• Who pays the trustee's fee?

Contents:

How much does a trustee earn?

At the outset, it is worth emphasizing that the trustee does not receive a monthly salary for his work. The trustee's remuneration, its amount and the terms of its payment are specified in the provisions of the Bankruptcy Law (BPL). According to art. 162 of the BPL, the trustee's remuneration is determined as the sum of five components, ranging from twice to two hundred and sixty times the base salary. The base salary should be understood as the average monthly salary in the corporate sector without bonuses paid from profit in the third quarter of the previous year, announced by the President of the Central Statistical Office.

What influences the amount of the trustee's remuneration?

In accordance with the Bankruptcy Law, the following components of the trustee's remuneration are distinguished:

• part depends on the amount paid to creditors as part of the implementation of the division plans, increased by the costs of terminating employment relationships with employees who were employed on the date of declaration of bankruptcy;
• a part depending on the number of employees employed on the date of declaration of bankruptcy;
• part depending on the number of creditors participating in the proceedings;
• a part depending on the duration of the bankruptcy proceedings from the date of declaration of bankruptcy to the date of execution of the final distribution plan;
• part determined by the court up to seventy base fees depending on the degree of difficulty of the proceedings and their effectiveness, in particular the complexity of the legal and factual situation of the bankruptcy estate, the dispersion of assets and the optimisation of the costs of the proceedings.

Part depends on the amounts paid to creditors as part of the implementation of the distribution plans. 

The legislator introduced five further categories here:

• one base salary – for an amount up to PLN 100,000.00,
• four bases of remuneration – for amounts ranging from PLN 100,000.01 to PLN 1,000,000.00,
• ten base salaries – for amounts ranging from PLN 1,000,000.01 to PLN 10,000,000.00,
• thirty base salaries – for amounts from PLN 10,000,000.01 to PLN 100,000,000.00,
• eighty base salaries – for a sum exceeding PLN 100,000,000.00.

The amount of the trustee's remuneration is therefore directly dependent on the amount paid to creditors, which is a key element motivating effective action in bankruptcy proceedings. The legislator introduced five thresholds, which aim to adjust the remuneration to the scale and difficulty of the trustee's work. Such a system promotes fair remuneration of the trustee, proportionally to the value of the assets managed. This principle also supports the interests of creditors, motivating the trustee to maximize the funds recovered. Thanks to this solution, the trustee has a greater incentive to take actions that will increase the amount paid to creditors, which is beneficial both for the trustee and for the persons participating in the proceedings.

Part dependent on the number employees employed by the fallen.

This part is determined as follows:

• half of the base salary – from 1 to 10 employees,
• three salary bases – from 11 to 50 employees,
• ten salary bases – from 51 to 200 employees,
• twenty base salaries – from 201 to 400 employees,
• thirty base salaries – over 400 employees.

The trustee's remuneration therefore also depends on the number of employees employed by the bankrupt, which affects the complexity and scope of his duties. The more people the company employed, the higher the basis for the trustee's remuneration, which means that greater responsibility for managing and restructuring the company's employment is appropriately rewarded. This model ensures that the trustee receives compensation proportional to the scale of his tasks, especially in the case of large companies requiring complex organizational activities. At the same time, if the bankrupt entrepreneur did not employ any employees, this part of the remuneration is not taken into account. Thanks to this approach, the remuneration system is adapted to the realities of the bankruptcy process.

Part depends on the number of creditors participating in the proceedings. In this respect the calculation is as follows:

• half of the base salary – up to 10 creditors,
• two bases of remuneration – from 11 to 100 creditors,
• four bases of remuneration – from 101 to 500 creditors,
• twenty base salaries – from 501 to 1000 creditors,
• forty base salaries – over 1,000 creditors.

The amount of the trustee's remuneration therefore also depends on the number of creditors participating in the bankruptcy proceedings. The more creditors, the more complex the management of the process becomes, and the remuneration increases in proportion to this complexity. Such a remuneration system takes into account the additional workload associated with serving a larger number of creditors, which may require more complex coordination and communication activities. As a result, the trustee receives an appropriate reward for the higher level of responsibility and time devoted to pursuing the interests of numerous creditors. In the case of a smaller number of creditors, the remuneration is lower, which also reflects the smaller scale of the duties. Such a structure promotes balanced and fair remuneration of the trustee's work.

The trustee's remuneration depends on the duration of the bankruptcy proceedings 

Slightly more extensive calculations are used to determine the part of the trustee's remuneration that depends on the duration of the bankruptcy proceedings. The amount of this part depends on the sum of the remuneration bases, determined on the basis of the calculation of the parts calculated so far, and is as follows:

For proceedings in which the sum of the base remuneration does not exceed eight times:

• four bases of remuneration if the proceedings lasted no longer than six months;
• two base salaries if the proceedings lasted more than six months but not more than twelve months;
• However, if the proceedings lasted longer than twelve months, the remuneration is not increased by this component.

For proceedings in which the sum of the base remuneration exceeds eight times but is not greater than forty times:

• eight bases of remuneration if the proceedings lasted no longer than twelve months;
• four base salaries if the proceedings lasted more than twelve months but not more than twenty-four months;
• However, if the proceedings lasted longer than twenty-four months, the remuneration is not increased by this component.

For proceedings in which the sum of the base remuneration exceeds forty times:

• forty base salaries if the proceedings lasted no longer than eighteen months;
• twenty base salaries if the proceedings lasted more than eighteen months but not more than thirty-six months;
• However, if the proceedings lasted more than thirty-six months, the remuneration is not increased by this component.

Slightly more extensive calculations are used to determine the part of the trustee's remuneration that depends on the duration of the bankruptcy proceedings. The amount of this part depends on the sum of the remuneration bases, determined on the basis of the calculation of the parts calculated so far, and is as follows:

For proceedings in which the sum of the base remuneration does not exceed eight times:

• four bases of remuneration if the proceedings lasted no longer than six months;
• two base salaries if the proceedings lasted more than six months but not more than twelve months;
• However, if the proceedings lasted longer than twelve months, the remuneration is not increased by this component.

For proceedings in which the sum of the base remuneration exceeds eight times but is not greater than forty times:

• eight bases of remuneration if the proceedings lasted no longer than twelve months;
• four base salaries if the proceedings lasted more than twelve months but not more than twenty-four months;
• However, if the proceedings lasted longer than twenty-four months, the remuneration is not increased by this component.

For proceedings in which the sum of the base remuneration exceeds forty times:

• forty base salaries if the proceedings lasted no longer than eighteen months;
• twenty base salaries if the proceedings lasted more than eighteen months but not more than thirty-six months;
• However, if the proceedings lasted more than thirty-six months, the remuneration is not increased by this component.

The amount of the trustee's remuneration also depends on duration of bankruptcy proceedings, which is intended to adjust the remuneration to the level of complexity and length of the process. Higher allowances are provided for shorter proceedings, which is intended to motivate the trustee to conduct the process efficiently. In the case of proceedings lasting up to six months or up to eighteen months, depending on the level of remuneration, the trustee may receive additional base remuneration. As the proceedings are prolonged, these allowances decrease until they cease to be due after a specified time. Such a mechanism encourages efficiency and faster completion of the process, while adequately rewarding the trustee for longer, more demanding cases. As a result, the trustee receives remuneration adjusted to the time and commitment needed to complete the bankruptcy proceedings.

Part of the trustee's remuneration is determined at the discretion of the court

The fifth and last part of the remuneration is established by the Bankruptcy Court. In this respect, the Court is obliged to take into account the degree of difficulty of the bankruptcy proceedings and their effectiveness, including, above all, the level of complexity of the legal and factual situation of the bankruptcy estate, the dispersion of assets and the optimization of the costs of the proceedings. In its assessment, the Court may award the trustee remuneration of up to seventy bases of remuneration, which adequately takes into account other elements that have a significant impact on the trustee's workload, not yet taken into account by the legislator.

When is the trustee’s remuneration determined?

The trustee's remuneration is established in stages. First, the court establishes the so-called preliminary remuneration. The trustee collects advances on this remuneration in the amount of 75% of its amount. Only after the final division plan is submitted or a decision is issued on the dismissal or change of the trustee, or termination of the proceedings, the court establishes the final remuneration of the trustee.

Summary

The trustee has one of the most important functions in bankruptcy proceedings. Their remuneration depends on a number of circumstances related to the conduct of the proceedings. Therefore, it is impossible to answer the question "How much does a trustee earn?" directly. Their remuneration is individually determined for each proceeding based on detailed regulations, and its amount is materialized only after the entire bankruptcy procedure is completed.

Daniel Anisimowicz

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