Abstract A well‐functioning bankruptcy system is essential for economic stability, ensuring the efficient resolution of bankruptcies and the fair distribution of remaining assets. However, many jurisdictions face the issue of “empty,” “assetless,” or “insolvent” estates, where the assets of bankrupt entities are insufficient to cover the costs of the bankruptcy proceeding, particularly the compensation of bankruptcy trustees. This issue has been considered an obstacle in the Dutch legal practice by bankruptcy trustees, judges, and other lawyers for many years, and recently also by Dutch policymakers, but its actual size and approach for possible solutions have received little attention in scholarship. To this end, we conducted a comprehensive study of various aspects of the issue. Part of this study concerned the review of a number of foreign legal systems to learn from best practices abroad. This explorative part of our study provides a comparative analysis of 18 jurisdictions outside the Netherlands on how different countries address the challenge of compensating bankruptcy trustees in cases where estates lack sufficient funds. The goal of this part of our research was to look for the legal framework in those jurisdictions with the aim to provide an overview of existing funding strategies abroad. These strategies include public funding mechanisms, where the state covers trustee compensation in cases of insufficient assets, and advance payments by applicants to cover (initial) costs. Additionally, some systems rely on mechanisms like minimum guaranteed fees, insurance schemes, or funding from specialized bankruptcy funds. This part of the study concludes by offering an overview of the variety of bankruptcy trustee compensation in insolvent estates.
Vriesendorp et al. (Sat,) studied this question.
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