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The U.S. Trustee or Bankruptcy Administrator

The US Bankruptcy Administrator Program (USBA) is a judicial agency established by the US Congress in 1986.  It was designed and developed as a result of objection and dissatisfaction to the US Trustee program.  The Bankruptcy Administrator works as a non-judicial self-governing officer of the judiciary.   The Bankruptcy Administrator functions in six federal judicial districts of the states of Alabama and North Carolina.  The Bankruptcy Administrator supervises the administration of estates and manages trustees and other estate fiduciaries in bankruptcy cases.  The major duties of a Bankruptcy Administrator are:

  • It supervises all bankruptcy trustees.
  • It supervises all Chapter 11 debtors.
  • It recommends alleged criminal activities to the U.S. Attorney and Federal Bureau of Investigation for investigation.
  • It appears in bankruptcy court, district, and circuit courts on matters associated with bankruptcy cases.
  • It reviews and responds to all requirements for professional employment and compensation.
  • It reviews and move for dismissal of all cases of abuse of the bankruptcy system.

USBA is separate and distinct from the federal bankruptcy courts.  However, the USBA and its attorneys appear before the US Bankruptcy Courts to assist in the administration of bankruptcy cases.  Moreover, USBA works in coordination with government agencies such as Department of Justice, the Federal Bureau of Investigation, and the Internal Revenue Service to recognize and investigate bankruptcy fraud and exploitation.  However, the Bankruptcy Administrators program is separate and distinct from the US Trustee program.

Bankruptcy Administrators program is administered by the Administrative Office of the US Courts whereas US Trustee program is administered by the executive branch of the Department of Justice.  Bankruptcy Administrators are authorized to approve and maintain a list of approved credit counseling agencies and debtor education providers in their respective districts.

The US Trustee has an important role in supervising the progress and administration of a Chapter 11 bankruptcy case.  The US Trustee is responsible in supervising the operation of debtor’s business in possession and obtains the relevant operating reports and fees.  Moreover, it monitors the compensation and reimbursement package to the professionals, and plans and discloses statements to the court and creditors’ committees.  Under Chapter 11, the US Trustee is also responsible for conducting section 341 creditors’ meeting to observe the debtor’s acts, conduct, real property of the business, and administration of the case.  Additionally, the US Trustee necessitates the reports in connection with the monthly income and operating expenses of the debtor’s business in possession, creation of new bank accounts, and postponement of current employee payment and other taxes.

The bankruptcy code insists that the debtor’s business in possession should pay a quarterly fee to the US Trustee in proportion with the disbursements.  If the debtor fails to fulfill the reporting requirements of the US Trustee or orders of the bankruptcy court, the US Trustee can initiate to file a motion for converting Chapter 11 case to any other bankruptcy or for dismissal.

In general, Bankruptcy Administrators perform similar functions of US Trustee in the states of Alabama and North Carolina.

Inside The U.S. Trustee or Bankruptcy Administrator