Appointment of Interim Trustee: In Re Successor Borrower Services LLC

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U.S. Bankruptcy Court, Western District of New York

Appointment of Interim Trustee

Statement of Qualifications

In Re Successor Borrower Services LLC
09-13505
Judge Bucki

Background: The acting U.S. Trustee filed an ex parte motion seeking the court’s approval of her proposed designation of an interim trustee in Chapter 11. Pursuant to 11 U.S.C. §1104(a), the court previously granted the motions of the acting U.S. Trustee and of a creditor for the appointment of a trustee in the Chapter 11 case. The Bankruptcy Code states that when the court orders such an appointment, after consultation with parties in interest the trustee shall appoint, subject to the court’s approval, one disinterested person other than the  U.S. trustee to serve as trustee.

Ruling: The application is denied and will require in this particular case that a hearing be scheduled on any new or renewed application for the approval of an interim trustee. The acting U.S. Trustee provided no meaningful information about the qualifications of the proposed Chapter 11 trustee.
“To the best of the court’s knowledge, the proposed Chapter 11 trustee has never served as a trustee in this district and has never appeared in any case filed in this district. In those instances where the proposed trustee is someone who regularly practices before the court, a short statement of credentials may suffice. But here, with no reason to assume familiarity, the U.S. Trustee has failed to provide any of the kind of information that the court would need to conduct a deliberative review of the proposed appointment. Surely, before granting approval, the court should receive something more than the name and address of the proposed trustee,” the court stated before rejecting the motion.

Joseph W. Allen, assistant U.S. Trustee; Ronald J. Friedman for the Proposed Attorneys for Operating Chapter 11 Trustee