873. Adverse Interest and Conduct—18 U.S.C. § 154
This section prohibits a custodian, trustee, marshal, or other officer of the court of a bankruptcy estate from (1) purchasing property of that bankruptcy estate, (2) refusing to permit a party in interest a reasonable opportunity to inspect the books and records relating to the bankruptcy estate after being ordered to do so by the court, and (3) refusing to permit a United State Trustee a reasonable opportunity to inspect the books and records relating to the bankruptcy estate. The acts proscribed in this statute need only be done knowingly. They do not have to be done fraudulently. A violation of this statute is an infraction punishable by a fine and removal from office. The first part of this section seeks to prohibit all self-dealing by an officer of the court.
Subsection (1) of Section 154 provides:
The prohibition against the purchase of any property of a bankruptcy estate of which the person is an officer may continue after the officer resigns or is otherwise terminated. In re Grodel Mfg., Inc., 33 B.R. 693 (Bankr. D. Conn. 1983)(former trustee prohibited from acquiring interest in reorganized Chapter 11 company because of "appearance of impropriety"); but see, In re Russo, 762 F.2d 239 (2d Cir. 1985)(no per se prohibition against purchase of estate property by former trustee).
Subsection (2) of Section 154 provides:
Subsection (2) requires a prior court order to issue directing the defendant to permit a reasonable opportunity for inspection of records relating to the affairs of the bankruptcy estate. Although the term "party in interest" is not defined in either Title 11 or Title 18, it generally means someone who has an interest in the proceeding-- e.g., the debtor, creditor or trustee.
Subsection (3) of Section 154 provides:
This allows the United States Trustee access to documents and accounts relating to the affairs of an estate without the necessity of a court order. Therefore, the principal difference between this subsection and Subsection (2) is that no prior court order is required.