USA Law and Practice Contributed by: Davis Lee Wright, Natalie D. Ramsey, Katherine M. Fix and Rachel Jaffe Mauceri, Robinson & Cole LLP
Different Types of Liquidation Procedure and 5.2 Course of the Liquidation Procedure ); • corporate dissolutions and wind-down proceed - ings (see 5.1 The Different Types of Liquidation Procedure and 5.2 Course of the Liquidation Procedure ); and • liquidations (state law generally governs the liqui - dation of insurance-related business assets). The federal district courts within each of the United States’ 14 federal circuits refer bankruptcy cases to bankruptcy courts sitting within those districts. Bankruptcy judges preside over cases filed under the Bankruptcy Code. Each Court of Appeals appoints bankruptcy judges within their circuit to a 14-year term. United States Trustee 1.3 Statutory Officers Federal Bankruptcy Code Bankruptcy courts/judges The Office of the United States Trustee (UST), appoint - ed by the Attorney General, oversees cases filed under the Bankruptcy Code within a specific region on behalf of the US government. Bankruptcy administrator In jurisdictions that opted out of the UST Program, the respective Courts of Appeals appoint a bankruptcy administrator (BA) to oversee bankruptcy cases. BAs do not possess the same statutory authority as USTs and must seek such authority from the bankruptcy judge. Debtor-in-possession (DIP) A business that files a Chapter 11 reorganisation usu - ally remains “in possession” and continues to operate its business and control its assets. The DIP has many of the powers of a trustee along with a fiduciary duty to manage the assets for the benefit of creditors. Trustee Upon a Chapter 7 petition, the UST appoints an interim Chapter 7 trustee from a list of pre-qualified trustees. The interim trustee serves until the creditors’ meeting is held, at which point the creditors may elect a different trustee.
If the bankruptcy court orders the appointment of a Chapter 11 trustee, the UST will consult with parties- in-interest and select a trustee for approval by the bankruptcy court. A trustee replaces the debtor’s existing management and board of directors. In Chapter 7, the trustee liq - uidates estate assets and distributes the proceeds to creditors. In Chapter 11, the trustee operates the debtor’s business for the benefit of the creditors and supervises the debtor’s properties and the estate. The trustee files the plan of reorganisation or liquidation (the “plan”). Creditors’ committee In a Chapter 11 case, the UST, following a solicita - tion and a sufficient indication of interest, is required to appoint an official committee of unsecured credi - tors. In non-UST jurisdictions, the BA provides a list of creditors to the bankruptcy judge to approve and appoint to the committee. The committee is author - ised to retain professionals and engage in all aspects of the bankruptcy case to advance the interests of all unsecured creditors. In Chapter 7 cases, the creditors themselves may elect a committee of between three and 11 creditors. An unsecured creditors’ commit - tee owes a fiduciary duty to the individual unsecured creditors to advance the interests of the unsecured In a Chapter 11 case, usually in lieu of a trustee, the bankruptcy court may appoint an examiner to investi - gate specific matters related to the debtor. If an exam - iner appointment is ordered, the UST will consult with parties in interest and select an examiner for approval by the bankruptcy court. The examiner will report its investigatory findings to the bankruptcy court. State Statutory or Common Law Assignee In an ABC, a state court appoints an assignee to act as a creditor fiduciary. The assignee liquidates the assets and makes distributions to creditors pursuant to state law. creditors. Examiner
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