Trustee deregistered for failure to meet bankruptcy act standards

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On 2 February 2024, the Inspector-General in Bankruptcy cancelled the registration as a trustee of Mr Paul Leroy (Registration number 409). This cancellation is effective from 5 February 2024.

The Inspector-General found that Mr Leroy did not meet the standards of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act). Specifically, Mr Leroy has failed to maintain mandatory professional indemnity and fidelity insurance cover.

Mandatory insurance cover is a fundamental requirement for registered trustees to operate in Australia.

Under the Bankruptcy Act, the immediate effect of the deregistration is that all of the bankruptcy estates Mr Leroy was responsible for administering automatically transfer to the Official Trustee in Bankruptcy (Official Trustee).

This means that effective 5 February 2024 the Official Trustee is the new trustee for these estates.

The Australian Financial Security Authority has begun directly contacting individuals whose estates were being administered by Mr Leroy prior to his deregistration, as well as their creditors.

Concurrent with the act of deregistration, the Inspector-General is investigating the management of bankrupt estates administered by the now deregistered trustee. The investigation is ongoing and further details will be provided at an appropriate time.

The Inspector-General in Bankruptcy is committed to protecting the integrity of Australia’s personal insolvency system and will continue to take swift and strong action as and when required.

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