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Appointment or Election of a Case Trustee
Although the appointment of a case
trustee is a rarity in a chapter 11 case,
a party in interest or the United States
trustee can request the appointment of
a case trustee or examiner at any time
prior to confirmation in a chapter 11
case. The court, on motion by a party
in interest or the United States trustee
and after notice and hearing, shall
order the appointment of a case
trustee for cause, including fraud,
dishonesty, incompetence, or gross
mismanagement, or if such an
appointment is in the interest of creditors,
any equity security holders, and
other interests of the estate. 11 U.S.C.
§ 1104(a).
The trustee is appointed by
the United States trustee, after consultation
with parties in interest and subject
to the court's approval. Fed. R.
Bankr. P. 2007.1. Alternatively, a
trustee in a case may be elected if a
party in interest requests the election
of a trustee within 30 days after the
court orders the appointment of a
trustee. In that instance, the United
States trustee convenes a meeting of
creditors for the purpose of electing a
person to serve as trustee in the case.
11 U.S.C. § 1104(b).
The case trustee is responsible for
management of the property of the
estate, operation of the debtor's business,
and, if appropriate, the filing of
a plan of reorganization. Section 1106
of the Code requires the trustee to file
a plan "as soon as practicable" or,
alternatively, to file a report explaining
why a plan will not be filed or
to recommend that the case be converted
to another chapter or dismissed.
11 U.S.C. § 1106(a)(5).
The court, after notice and hearing,
may, at any time before confirmation,
upon the request of a party in interest
or the United States trustee, terminate
the trustee's appointment and restore
the debtor to possession and management
of the property of the estate and
of the operation of the debtor's business.
11 U.S.C. § 1105.
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