Actions

The Actions Following the Discovering of Bad Practice

As mentioned earlier, the Ombudsman can inform the administrator or trustee or the creditors about any cases of negligence or abuse that he has discovered. In many cases this kind of information will be enough to have the incorrect course of action corrected. The Ombudsman can also inform the proper authority, as the police, the prosecutor or the taxing authorities.

The Ombudsman can also turn to the court and demand

that the administrator or trustee who has neglected his or her duties is fined unless he fulfills his duties (see section 7,1 of the Act).

This coercion can be applied for instance if the administrator or trustee has failed to send the Ombudsman the information he has asked for or deliver the documents that are requested for the purposes of inspection.

that the administrator or trustee is dismissed from his or her duties, if the administrator or trustee has essentially neglected his or her duties or for other weighty reasons (see section 7,2).

According to the starting points of the Act, while measuring the essentiality of the negligence the Ombudsman and the court should pay attention especially to the signifigance of the negligence for the administration of the estate and the harmfulness and repetition of the negligence. A weighty reason exists if the competence of the administrator or trustee has proved to be insufficient or if some other circumstances prove that he cannot be regarded as a suitable person for the job.

that the administrator's or trustee's fee must be reduced if he has essentially neglected his or her duties or if the fee is clearly above a reasonable level (see section 7,3 of the Act).

The demand concerning the reducement of the fee must be made to the proper court in 30 days after the creditors have made the decision about the fee (7,3). The Ombudsman recieves the information about the fee when the minutes of the creditors meeting are sent to him.

The Ombudsman has also the right of legislative initiative and other suggestions for actions in order to correct faults that he has discovered (see section 1,1 of the Act). A similar right belongs to the Advisory Board for Bankruptcy Affairs (see section 7,2 of the Bankruptcy Estates Administration Supervision Statute).

Last updated 26.08.2004