The United States Trustee is charged with responsibility for supervising chapter 11 cases. Chapter 11 cases present a wide array of issues and challenges, and the statutes accord the United States Trustee broad discretionary authority to act in these cases. Responsible and efficient use of the Program's limited resources requires that priorities be established and maintained. The following basic principles can serve to guide Program employees in the reasoned exercise of their discretion in chapter 11 cases.

One of the most important functions of the United States Trustee in a chapter 11 case is to ensure the integrity of the chapter 11 process. This can be accomplished by both monitoring and, when warranted, commenting on the actions of parties to the case, as well as by ensuring that the bankruptcy system itself functions effectively and efficiently. The integrity of the process depends on the involvement of all parties with an interest in the case. The United States Trustee should strive to facilitate creditor involvement.

During the initial stages of a case, the United States Trustee should focus on certain principal administrative responsibilities. The debtor and its counsel should be contacted and provided with guidance and instruction regarding their statutory responsibilities and fiduciary obligations. A creditors' committee must be formed promptly, if possible. The first meeting of creditors must be scheduled within the time limits established by the Federal Rules of Bankruptcy Procedure.

The United States Trustee may, at his/her discretion, limit his/her involvement in those chapter 11 cases with significant creditor interest and activity. In many instances, the presence of competing interests will serve to ensure that significant issues in a case are raised and resolved by the parties themselves, and will assist in moving the case forward without frequent involvement by the United States Trustee. The United States Trustee should not seek to substitute his/her business judgment for that of creditors or other parties in interest. For example, creditors vote on plans of reorganization. They have the right to make their own determinations as to what would constitute an acceptable return under the terms of a given plan.

Regardless of the level of creditor activity, however, the United States Trustee has a statutorily defined role in chapter 11 cases. When the United States Trustee considers appropriate, he/she shall monitor applications for compensation and reimbursement, plans and disclosure statements, and applications for the retention of professionals. See 28 U.S.C. § 586(a)(3)(A), (B), and (H). Therefore, the United States Trustee should take the necessary steps to ensure that the office receives copies of all significant pleadings and orders.

Chapter 11 cases often present circumstances requiring the United States Trustee to take a more active role. For example, creditor involvement may be limited or non-existent. Also, issues involving the fundamental integrity of the bankruptcy system, e.g., conflicts of interest or allegations of criminal misconduct, must be addressed quickly and thoroughly by the United States Trustee. Because these matters must be confronted, the United States Trustee should use his/her discretion in the optimum allocation of resources.

Decisions regarding the degree of involvement necessary in a particular chapter 11 case ultimately are committed to the sound discretion of the Program's managers and professionals. The exercise of that discretion should be guided by the principles enunciated herein, as well as by consideration of available resources and priorities in other areas.