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VOLUME 3: CHAPTER 11 CASE ADMINISTRATION

CHAPTER 3-1: POLICY CONSIDERATIONS
3-1.1 GENERALLY
CHAPTER 3-2: VOLUNTARY CASE ADMINISTRATION
3-2.1 FILING REQUIREMENTS
3-2.2 CASE FILING NOTIFICATION AND DOCUMENT RECEIPT
3-2.3 INITIAL REVIEW
3-2.3.1 Signature Requirements
3-2.3.2 Authorization for Filing
3-2.3.3 Debtor Eligibility
3-2.4 REPRESENTATION BY COUNSEL
3-2.5 GENERAL CASE REVIEW
3-2.6 RELATIONSHIPS WITH OTHER GOVERNMENTAL AGENCIES
3-2.7 MONITORING BANK ACCOUNTS
3-2.7.1 11 U.S.C. § 345
3-2.7.2 Pledges of Securities at the Federal Reserve Bank
3-2.7.3 Acceptable Securities for Pledge as Collateral
3-2.7.4 Deposit or Investment Secured by a Bond
3-2.8 REVIEW OF INITIAL PLEADINGS
3-2.8.1 Employment of Professionals
3-2.8.2 Employment of Other Professionals
3-2.8.2.1 Classification as a Professional
3-2.8.2.2 Duties and Compensation
3-2.8.3 Cash Collateral Use and Financing Orders
3-2.8.3.1 Cash Collateral Versus Postpetition Financing
3-2.8.3.2 Notice and Hearing Requirements
3-2.8.3.3 United States Trustee's Role on Substantive Issues
3-2.8.4 Payments to Prepetition Creditors
3-2.8.4.1 Background of the Doctrine of Necessity
3-2.8.4.2 Statutory References
3-2.8.4.3 Types of Requests
3-2.8.4.4 United States Trustee's Position on Doctrine of Necessity Requests
3-2.8.5 Joint Administration and Substantive Consolidation
3-2.8.6 Small Business Election
CHAPTER 3-3: INITIAL DEBTOR INTERVIEWS
3-3.1 INITIAL DEBTOR INTERVIEWS (IDIs)
3-3.1.1 Procedure for Setting Up the IDI
3-3.1.2 United States Trustee's Initial Assessment of the Case
3-3.1.3 Familiarizing the Debtor with its New Fiduciary Obligations
3-3.2 OPERATING GUIDELINES
3-3.2.1 General Provisions
3-3.2.2 Bank Accounts
3-3.2.3 Insurance
3-3.3 FINANCIAL REPORTS
3-3.3.1 Cash Receipts and Disbursements Statement
3-3.3.2 Statement of Operations
3-3.3.3 Balance Sheet
3-3.3.4 Schedule of Postpetition Liabilities
3-3.3.5 Postpetition Taxes Payable (Tax Reconciliation) Statement
3-3.3.6 Additional Reporting Requirements

CHAPTER 3-4: CREDITORS' COMMITTEES
3-4.1 11 U.S.C. §§ 1102 AND 1103
3-4.2 ORGANIZATIONAL MEETING
3-4.2.1 Purpose
3-4.2.2 Notice
3-4.2.3 Attendance
3-4.2.4 Agenda
3-4.2.4.1 Introduction
3-4.2.4.2 Explanation of Roles of the United States Trustee and the Creditors' Committee
3-4.2.4.3 Debtor's Presentation
3-4.2.4.4 Appointment of the Creditors' Committee
3-4.2.5 Selection of Professionals
3-4.2.6 Fees of Professionals
3-4.2.7 Expenses of Committee Members
3-4.3 FORMATION OF A CREDITORS' COMMITTEE BY ALTERNATIVE MEANS
3-4.4 THE COMMITTEE SELECTION PROCESS
3-4.4.1 Membership Issues
3-4.4.1.1 Unions
3-4.4.1.2 Landlords
3-4.4.1.3 Secured Creditors
3-4.4.1.4 Competitors
3-4.4.1.5 Professionals Formerly Employed by the Debtor
3-4.4.1.6 Governmental Units
3-4.4.1.7 Insiders
3-4.4.1.8 Contingent, Unliquidated, or Disputed Claims
3-4.4.1.9 Indenture Trustees
3-4.4.1.10 Equity Security Holders
3-4.4.1.11 Claims Trading
3-4.4.2 Prepetition Committees
3-4.4.3 Attempts to Preempthe Selection Process
3-4.4.4 Small Businesses -- Requests Not to Form a Creditors' Committee
3-4.4.5 Involuntary Cases
3-4.5 NUMBER OF COMMITTEES
3-4.6 EQUITY SECURITY HOLDERS' COMMITTEE
3-4.7 NOTIFICATION TO COURT REGARDING INABILITY TO APPOINT A COMMITTEE
3-4.8 MODIFICATION OF COMMITTEE MEMBERSHIP
3-4.8.1 Considerations
3-4.8.2 Substitutions
3-4.8.3 Removal of Members
3-4.8.4 Applicable Standard of Review
CHAPTER 3-5: SECTION 341 MEETING
3-5.1 INTRODUCTION
3-5.2 SCHEDULING
3-5.3 NOTICE
3-5.4 SCOPE OF EXAMINATION
3-5.5 CONDUCTING THE MEETING
3-5.6 QUESTIONING THE DEBTOR
3-5.7 ATTENDANCE BY CREDITORS, THE MEDIA,
3-5.8 IMMUNITY, SELF-INCRIMINATION, AND REFUSAL, TO ANSWER QUESTIONS
3-5.9 PROOFS OF CLAIM
3-5.10 CONTINUANCES AND APPEARANCES
3-5.11 ADJOURNMENTS AND SPECIAL MEETINGS
3-5.12 CONDUCT OF SECTION 341 MEETINGS FOR HEARING-IMPAIRED DEBTORS
3-5.13 FOREIGN LANGUAGE INTERPRETERS
3-5.14 SECURITY AT SECTION 341 MEETINGS
CHAPTER 3-6: EMPLOYMENT ISSUES
3-6.1 EMPLOYMENT OF PROFESSIONALS
3-6.1.1 11 U.S.C. § 327 and Fed. R. Bankr. P. 2014
3-6.1.2 11 U.S.C. § 329 and Fed. R. Bankr. P. 2016(b) and 2017
3-6.1.3 Definition of Professional Person
3-6.1.4 Auctioneers and Appraisers
3-6.1.5 11 U.S.C. § 327(e)
3-6.2 THE DISINTERESTED PERSON REQUIREMENT FOR THE EMPLOYEMENT OF PROFESSIONALS AND THE APPOINTMENT OF TRUSTEES AND EXAMINERS
3-6.2.1 Statutory Provisions
3-6.2.1.1 11 U.S.C. §§ 101(14) and 327(a)
3-6.2.1.2 11 U.S.C. § 101(14)(A)-(D)
3-6.2.1.3 Overlap of 11 U.S.C. § 101(14)(E) and 11 U.S.C. § 327(a)
3-6.2.2 Special Problems in Related Cases
3-6.2.2.1 Appointment of a Trustee
3-6.2.2.2 Retention of Professionals
CHAPTER 3-7: COMPENSATION ISSUES
3-7.1 DETERMINATION OF REONABLE COMPENSATION, 11 U.S.C. § 330 AND FED. R. BANKR. P. 2016(a)
3-7.2 RETAINERS
3-7.3 INTERIM COMPENSATION, 11 U.S.C. § 331
3-7.4 RESPONSIBILITY OF PARTIES TO CONTROL COSTS
3-7.5 FEE PROCEDURE ORDERS
3-7.6 TRUSTEE COMPENSATION

CHAPTER 3-8: QUARTERLY FEES
3-8.1 INTRODUCTION
3-8.2 INFORMING PARTIES OF THE FEE REQUIREMENT
3-8.3 FEE AMOUNT AND DUE DATE
3-8.3.1 Calculation of the Fee
3-8.3.1.1 Operating Expenses
3-8.3.1.2 Cash Collateral/Financing Order Payments
3-8.3.1.3 Payments Out of Escrow or By Third Parties
3-8.3.1.4 Non-Cash Transactions
3-8.3.2 Fee Due Dates and Periods Covered
3-8.3.3 Fees in Jointly Administered and Substantively Consolidated Cases
3-8.4 BILLING AND COLLECTION PROCEDURES
3-8.4.1 Bill Generation Process
3-8.4.2 Fee Payments and Refunds
3-8.4.2.1 Payment Procedures
3-8.4.2.2 Determination of Payments
3-8.4.2.3 Payment Problems
3-8.4.2.4 Payment Refunds
3-8.4.3 Payment Adequacy Review
3-8.4.4 Delinquent Payment Review and Collection Efforts
3-8.4.5 Encouraging Voluntary Compliance
3-8.4.6 Legal Action
3-8.5 WRITE-OFF PROCEDURES
3-8.5.1 Confirmed Chapter 11 Cases
3-8.5.2 Dismissed Chapter 11 Cases
3-8.5.3 Converted Chapter 11 Cases
3-8.5.4 Standards
3-8.5.4.1 Timing of Write-off
3-8.5.4.2 Write-off Guidelines
3-8.5.4.3 Effect of Write-off
3-8.5.5 Debt Collection by Third Parties
3-8.5.6 Documentation
CHAPTER 3-9: MONITORING THE CASE
3-9.1 CASE ADMINISTRATION
3-9.2 STANDING
3-9.3 OBTAINING EVIDENCE
3-9.3.1 Section 341 Meeting
3-9.3.2 Fed. R. Bankr. P. 2004 Examination
3-9.3.3 Other Discovery Devices and Orders to Compel Attendance for Examination
3-9.4 PROBLEMS AND RESPONSES
3-9.4.1 Failure to File Schedules
3-9.4.2 Failure to Attend Section 341 Meeting
3-9.4.3 Failure to Designate Corporate Official
3-9.4.4 Failure to File Operating Reports
3-9.4.5 Failure to Maintain Insurance or to Pay Administrative Taxes
3-9.4.6 Failure to File a Plan of Reorganization and/or Disclosure Statement
3-9.4.7 Failure to Give Proper Notice of a Settlement Agreement, the Disposition of Property, or a Cash Collateral/Adequate Protection Agreement
3-9.4.8 Failure to Deposit or Invest Funds as Required by 11 U.S.C. § 345
3-9.4.9 Continuing Losses or Other Diminution of the Estate
3-9.4.10 Improper Postpetition Transfers
3-9.4.11 Failure to Comply with Court Order
3-9.4.12 Unauthorized Postpetition Payments to Professionals
3-9.4.13 Ongoing Insolvency Proceedings in Another Forum
3-9.4.14 Sale of Substantially All of a Debtor's Assets
3-9.4.15 Failure to Pay Quarterly Fees
3-9.4.16 Environmental Problems
3-9.5 CHOICE OF REMEDY--DISMISSAL OR CONVERSION
3-9.5.1 11 U.S.C. § 1112
3-9.5.2 Dismissal
3-9.5.3 Conversion
3-9.6 APPOINTMENT OF A TRUSTEE OR EXAMINER
3-9.6.1 11 U.S.C. § 1104
3-9.6.2 Choice of Remedy -- Trustee or Examiner
3-9.6.3 Selection Process
3-9.6.4 Court Approval of Trustee and Examiner Appointments
3-9.6.5 Termination of a Trustee's Appointment
3-9.6.6 Removal of a Trustee or Examiner
3-9.7 ELECTION OF A TRUSTEE
3-9.7.1 Requests for Election
3-9.7.2 Election Procedures
3-9.7.3 Eligible Voters
3-9.7.4 Determining Election Results
3-9.7.5 Solicitation of Proxies
3-9.7.6 Qualifications of an Elected Trustee

CHAPTER 3-10: REVIEW OF DISCLOSURE STATEMENTS AND PLANS
3-10.1 INTRODUCTION
3-10.2 THE CONCEPTUAL FRAMEWORK
3-10.2.1 Items to Include
3-10.2.2 "Safe Harbor," 11 U.S.C. § 1125(e)
3-10.2.3 Factors Affecting Adequacy of Disclosure
3-10.3 CONDUCTING THE REVIEW
3-10.3.1 Standard Language
3-10.3.2 Description of the Debtor's Business
3-10.3.3 Reasons for Financial Difficulties and Correction of Those Factors
3-10.3.4 Historical and Current Financial Information
3-10.3.5 Material Postpetition Events
3-10.3.6 Outline of the Plan
3-10.3.7 Means of Effectuating the Plan
3-10.3.8 Securities to be Issued
3-10.3.9 Projections
3-10.3.10 Management, 11 U.S.C. § 1129(a)(5)
3-10.3.11 Controlling Persons
3-10.3.12 Insider and Affiliate Claims
3-10.3.13 Transactions with Insiders and Affiliates
3-10.3.14 Disputed Claims
3-10.3.15 Legal Proceedings
3-10.3.16 Tax Consequences
3-10.3.17 Trustee or Examiner
3-10.3.18 Creditors' Committees and Equity Security Holders' Committees
3-10.3.19 Information Regarding Plan Proponent
3-10.3.20 Liquidation Analysis
3-10.3.21 Vote Required for Acceptance
3-10.3.22 "Cram Down"
3-10.3.23 Miscellaneous Matters
3-10.3.24 Summary and Table of Contents
3-10.3.25 Notice
3-10.4 PREPETITION SOLICITATION
3-10.5 PLAN MODIFICATION
3-10.6 REVIEW OF PLAN AND CONFIRMATION
3-10.7 POSTCONFIRMATION MONITORING
CHAPTER 3-11: INVOLUNTARY CHAPTER 11 CASE ADMINISTRATION
3-11.1 INTRODUCTION
3-11.2 STATUTORY AND BANKRUPTCY RULE PROVISIONS
3-11.3 APPOINTMENT OF A TRUSTEE PRIOR TO ENTRY OF AN ORDER FOR RELIEF
3-11.4 PROFESSIONAL FEES DURING THE GAP PERIOD
3-11.5 DISMISSAL
CHAPTER 3-12: RAILROAD REORGANIZATIONS
3-12.1 INTRODUCTION
3-12.2 APPOINTMENT OF A TRUSTEE
3-12.3 OPERATIONS DURING THE GAP PERIOD
3-12.4 OTHER PROVISIONS APPLICABLE ONLY TO RAILROAD REORGANIZATIONS

Last Update: March 24, 2006 11:20 AM
U.S. Trustee Program/Department of Justice
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