Bankruptcy case administration resembles outsourcing by reason of the long term involved, the support that the external service provider delivers to the bankrupt enterprise (by the debtor-in-possession or the trustee in bankruptcy), and the value of scalability in well defined “judicial” processes. Indeed, this form of service can be called “judicial process outsourcing” (“JPO”).
JPO differs from classic outsourcing because the “enterprise customer” is the Bankruptcy Court, the trustee or debtor-in-possession and the beneficiaries are the creditors. Thus, the services protect the interests of many constituencies.
Bankruptcy proceedings start with the filing of a petition (either voluntary or involuntary) for bankruptcy. The petition discloses the debtor’s assets and liabilities, a list of creditors, recent payees and other relevant information. The information can be used to establish a data base for eventual processing according to the bankruptcy code.
Administration of bankruptcy proceedings requires timely computation of data, communications with creditors and debtor-in-possession (or the trustee), docketing of information in the public records, negotiations with suppliers on refunds of statutory preferences, assertion of claims against creditors and third parties and other activities to protect and preserve the “estate” for eventual reorganization or dissolution.
Bankruptcy case administration has become a competitive business service. Many administrators add value by providing strategic advisory services as well as case management.