Legal Protection of Bankrupt Debtors and Creditors Against Curators’ Actions That Diminish the Bankruptcy Estate

Abstract

The curator exercises control over the bankruptcy estate, including its receipts and expenditures, under the supervision of the supervisory judge in bankruptcy proceedings. In practice, however, some curators may engage in unlawful acts that diminish the bankruptcy estate, thereby causing losses to both bankrupt debtors and their creditors. Legal protection for bankrupt debtors and creditors, together with effective legal measures, is therefore necessary to ensure legal certainty and justice for both parties. This study aims to evaluate the structural weaknesses in the supervisory judge’s institutional oversight of the curator’s attributed authority and to formulate effective repressive legal measures available to debtors and creditors in response to unlawful acts or criminal offenses committed by curators that demonstrably cause losses to the bankruptcy estate. This study employs a normative juridical research method with a descriptive-analytical research specification. The supervisory judge may exercise oversight through passive, proactive, or responsive approaches. Although the supervisory judge may adopt any of these three approaches, there is no obligation to apply any particular approach. The supervisory judge also serves to limit the curator’s powers and authority within a system of checks and balances. Creditors and bankrupt debtors who suffer losses as a result of unlawful acts committed by a curator may pursue criminal and/or civil legal remedies.