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assets. Identifying the specific goals of the liquidation upfront will allow the liquidating trustee to match the skills of the debtor's former employees necessary to carry out these predefined goals. Some liquidating trusts include performance incentives and success metrics tied to recoveries for the unsecured creditors. These incentives should be tailored so that the cost and expense of retaining the debtor's former employees will more than offset the cost and expense of their continued employment.
A liquidating trustee generally has broad authority to operate business segments pending their sale. By comparison, a chapter 7 trustee has much less power to conduct a debtor's business affairs. Often, a chapter 7 trustee is only able to obtain fire sale value, while a liquidating trustee has greater flexibility to market and sell assets.
Generally, the liquidating trustee is tasked with the responsibility of administering claims. This means that the liquidating trustee must analyze and object to claims, where appropriate. The liquidating trust should be structured to encourage the prompt resolution of claims. This can be accomplished by setting deadlines to file claim objections. For example, some liquidating trust agreements provide that all claim objections must be filed within sixty (60) days after the effective date of the confirmed chapter 11 plan. Other liquidating trusts allow for alternative dispute resolution programs to expedite the administration of claims. Additionally, some liquidating trusts allow for the settlement of claims under a certain dollar amount without the necessity of approval by the bankruptcy court This is another time-saving feature of many
