Trustee Duties & Responsibilities Flashcards

Under 11 U.S.C. § 363(b), what is required before a trustee may sell property of the estate outside the ordinary course of business?

Answer: Notice to all parties in interest and a court hearing, followed by court approval

Under 11 U.S.C. § 363(b), a trustee may sell estate property outside the ordinary course of business only after providing notice and an opportunity for a hearing, with ultimate approval from the bankruptcy court.

Under 11 U.S.C. § 721, for how long may a trustee operate the debtor's business after the order for relief?

Answer: Only as authorized by the court for a limited period

Under 11 U.S.C. § 721, a trustee may operate the debtor's business only for a limited period specifically authorized by the court — there is no automatic right to operate indefinitely.

In bankruptcy administration, what is a 'surcharge' imposed on a trustee?

Answer: A reduction or elimination of the trustee's compensation as a sanction for breach of fiduciary duty or failure to properly perform statutory duties

A surcharge in trustee administration refers to a reduction or elimination of the trustee's own compensation imposed by the court as a sanction for breach of fiduciary duty or gross mismanagement of the estate.

Under 11 U.S.C. § 502(a), what is the default status of a properly filed proof of claim?

Answer: The claim is deemed allowed unless a party in interest files an objection

Under 11 U.S.C. § 502(a), a proof of claim filed in accordance with the rules is deemed allowed unless a party in interest — including the trustee — objects to its allowance.

What is the key distinction between a Chapter 7 panel trustee and a Chapter 13 standing trustee?

Answer: Panel trustees are appointed case-by-case in Chapter 7 and 11 cases; standing trustees administer all Chapter 12 and 13 cases in a district on an ongoing basis

Panel trustees are private individuals assigned to individual Chapter 7 (and sometimes Chapter 11) cases, while standing trustees are appointed to handle all Chapter 12 and 13 cases filed within a district on a continuous basis.

Under 11 U.S.C. § 544, the trustee's 'strong-arm' powers allow avoidance of transfers that could have been avoided by which hypothetical party as of the petition date?

Answer: A hypothetical judicial lien creditor or a bona fide purchaser of real property

Under 11 U.S.C. § 544, the trustee steps into the shoes of a hypothetical judicial lien creditor or bona fide purchaser of real property as of the petition date, enabling avoidance of unperfected or subordinate interests.

Under 11 U.S.C. § 330, which factors does the bankruptcy court consider when determining the reasonableness of a trustee's compensation?

Answer: The time spent, the nature and extent of services rendered, whether the services were necessary, and whether compensation is reasonable based on customary rates for comparable services

Under 11 U.S.C. § 330, courts assess trustee compensation by examining the time spent, the nature and necessity of services, and whether the rate is reasonable compared to customary rates charged for similar services in the relevant market.