It has been established by various jurisdictional courts that Licensed insolvency trustees are officers of the court.[3] As a result, they have the obligation to impartially represent the interests of all creditors of the bankrupt and to act equitably[4] between the competing interests of the different types of creditors.[5]
Standards of professional conduct
According to section 13.5 of the Bankruptcy and Insolvency Act, Licensed insolvency trustees are required to comply with the Code of Ethics for trustees set out in Rule 34 to 53 of the Bankruptcy and Insolvency General Rules. The Code of Ethics for trustees establishes service and advertising standards, states the information that trustees are required to provide to creditors and contains rules relating to the treatment of funds in trust and to the sale or purchase of a bankrupt's property.[6]
Licensed insolvency trustees are also expected to comply with the Standards of Professional Practice and the Rules of Professional Conduct issued by the Canadian Association of Insolvency And Restructuring Professionals (CAIRP). Designed to promote uniformity within the profession, these standards must be interpreted consistently with the Bankruptcy and Insolvency Act, the Bankruptcy and Insolvency General Rules, the Code of Ethics for trustees, the Superintendent of Bankruptcy's directives and all other applicable regulations.[7]
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