The United States Trustee Program is the component of the Department of Justice that works to protect the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.
The Program consists of an Executive Office for U.S. Trustees
in Washington, D.C., as well as 21 regional U.S. Trustee Offices
and 95 field offices that operate in all federal judicial
districts except those located in Alabama and North Carolina.
Generally, the duties of the U.S. Trustee in a Chapter 11
bankruptcy case are set forth in 28 U.S.C. § 586. They include
- First Day Orders. Reviewing the debtor's
requests for emergency orders early in a bankruptcy case,
and ensuring that the requested relief is tailored to the
circumstances. For example, debtors may seek immediate court
approval to retain professionals, obtain emergency financing,
and pay certain suppliers. These requests may affect the
rights of creditors and alter their ability to negotiate
the terms of the debtor's reorganization later in the case.
- Official Committees. Determining what
official committees should be established to serve in the
case; appointing committee members; and engaging in oversight
of committee actions. Each committee upholds the interests
of the creditor group it represents, such as unsecured creditors,
bond holders, or equity security holders. A committee usually
has seven to 15 members, representing different subgroups
of the creditor group. U.S. Trustee oversight includes organizing
the committee and supervising the professionals, such as
attorneys and accountants, who are employed by the committee.
- Reorganization Plans, Disclosure Statements. Reviewing
reorganization plans and disclosure statements filed by
parties in the case to make sure they provide adequate and
- Ensuring Compliance. Ensuring that all
required reports, schedules, and fees are timely filed,
and that the debtor manages money and assets consistent
with the Bankruptcy Code and with its fiduciary duty to
creditors. Required documents include the debtor's monthly
operating reports, tax returns, schedules of income and
expenses, and proof of insurance. These documents allow
parties to monitor the debtor's progress toward reorganization.
- Preventing Delay. Taking action to prevent
undue delay by, for example, filing a motion to dismiss
the case, to convert the case to a Chapter 7 liquidation,
or to appoint a Chapter 11 trustee.
- Professional Employment. Reviewing and,
if appropriate, objecting to applications filed by professionals
seeking employment in the case, payment of compensation,
and/or reimbursement of expenses. Professionals who serve
in the case--and receive payment from the bankruptcy estate--might
include attorneys, accountants, auctioneers, investment
advisors, "turnaround specialists," and real estate brokers.
The U.S. Trustee might object to employment of a law firm
on the ground that the firm has a conflict of interest arising
from its work for other clients. The U.S. Trustee might
also challenge the reasonableness of professional fees billed
in a case, such as charges for drafting a failed reorganization
plan after financial information clearly showed that the
plan would not be feasible.
- Fraud. Investigating criminal, fraudulent,
or abusive conduct for possible civil or criminal prosecution.
The U.S. Trustee pursues civil (non-criminal) penalties,
and refers cases of apparent criminal fraud to the U.S.
Attorney for investigation and criminal prosecution.
Jane Limprecht, Public Information
Executive Office for United States Trustees