8. Expenses of operation of the property.
9. Receivership expenses.
10. The assets at the close of the period covered by the report, exclusive of permanent or fixed assets.”[75]
This report may well be supported by a comparative balance sheet showing the condition at the time of the previous report and now. A profit and loss account to show the operations of the receiver is also helpful. A summary of all cash transactions may be included.
In a final report to the court a summary should be presented of all the operations since the beginning of the receiver’s control. This will, of course, show whatever property is turned back to the corporation. Upon the close of the receivership the receiver’s books may be closed up by crediting the accounts of the various assets which are turned back to the corporation, charging the corporation’s account which was originally set up at the time the property was taken over by the receiver and through which adjustments of the values of the assets have been made at the time of sale or otherwise. An important thing to keep in mind in connection with all accounts and reports of the receiver is the necessity for making full and adequate explanations of all entries, giving the authority for them and their source.
Accounts and Reports in
Bankruptcy Proceedings
Initial Statements Presented to the Court
In the case of a voluntary bankrupt, as was stated in [Chapter XXVIII], at the time of the petition to the court a schedule must be presented of all the property owned by the bankrupt and a list of his creditors giving the address, if known, the amount of the claim, the consideration, and the security held, if any. If the bankrupt makes any claim for exemption of any properties, that claim should be presented at this time. These schedules must follow the forms prescribed by the court. In the case of an involuntary bankrupt, these various schedules will, of course, not be available at the time the petition is made, inasmuch as the condition of the proposed bankrupt is undetermined; the amounts of his assets and of his liabilities are unknown. It becomes necessary, therefore, to examine him in the presence of the court for the purpose of securing a statement of all property owned and of all claims against it. This information, as elicited by court examination, becomes the basis for the receiver’s and trustee’s records. If a receiver is appointed by the court and remains in possession of the property for any length of time, it will be necessary for him to present periodic reports to show the condition of the property at various times and a statement of his operations. The reports which he will make will be similar to those which a trustee would make had he been appointed immediately; therefore, the matter of reports and accounts for both the receiver and the trustee can be treated together.
Reports and Accounts of Receiver or Trustee
The law provides that the trustee must keep regular accounts showing all amounts received and the sources from which received, and all amounts expended and on what account such expenditures were made. This would seem to imply merely the keeping of a record of the cash received and expended. The trustee, however, is looked upon both as the representative of the bankrupt, as custodian of his property, and as the representative of the creditors for the purpose of liquidating their claims. Immediately upon assuming office he must make, or cause to be made, a complete inventory of all property coming into his possession. In valuing this inventory all real and personal property belonging to the bankrupt’s estate must be appraised by three disinterested appraisers appointed by the court. The trustee must make a written report to the court of the condition of the estate, as to the amount of money on hand and any other details demanded by the court, within the first month after his appointment, and bimonthly thereafter unless otherwise ordered by the court. His final report must be made 15 days before the final meeting of the creditors is called by the court.