3-5.2 - SCHEDULING

The United States Trustee must schedule a meeting of creditors to be held not less than 20 nor more than 40 days after the order for relief. Fed. R. Bankr. P. 2003(a). However, if the United States Trustee designates a place for the meeting that is not regularly staffed by the United States Trustee, then the meeting may be scheduled not more than 60 days after the order for relief. The enlargement or reduction of these time periods is prohibited. Fed. R. Bankr. P. 9006(b)(2) and 9006(c)(2). If there is an appeal from or a motion to vacate the order for relief, or if there is a motion to dismiss the case, the United States Trustee may schedule a later date for the meeting. Fed. R. Bankr. P. 2003(a). The meeting may be held at a regular place for holding court or at any other place designated by the United States Trustee within the district convenient for the parties in interest. Fed. R. Bankr. P. 2003(c).

3-5.3 - NOTICE

Notice of the section 341 meeting must be provided to all parties of interest. Fed. R. Bankr. P. 2002(a)(1). Notice of the section 341 meeting is given by the clerk of the court or some other person as the court may direct (e.g., the debtor or an outside service) pursuant to Fed. R. Bankr. P. 2002(a)(1). At least 20 days notice of the meeting by ordinary mail is required under Fed. R. Bankr. P. 2002(a). Notice can be given by publication if notice by mail is impracticable or is desirable to supplement the notice. Fed. R. Bankr. P. 2002(1). The 20 day notice period may be modified by order of the court. Fed. R. Bankr. P. 9006. The United States Trustee should provide the clerk with the location, date, and time of the meeting well in advance of the noticing period to permit the clerk to notice the meeting in a timely fashion. The United States Trustee should ensure that committees, trustees, and examiners appointed after the noticing of the meeting or after the initial meeting be advised of the meeting or any adjourned meeting.

3-5.4 - SCOPE OF EXAMINATION

The scope of examination of the debtor pursuant to 11 U.S.C. § 343: [M]ay relate only to the acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor's estate, or to the debtor's right to a discharge. . . . [T]he examination may also relate to the operation of any business and the desirability of its continuance, the source of any money or property acquired or to be acquired by the debtor for purposes of consummating a plan and the consideration given or offered therefor, and any other matter relevant to the case or to the formulation of a plan. Fed. R. Bankr. P. 2004(b). The examination constitutes a broad inquiry into the debtor's financial condition, the operation of its business, the desirability of its continuation, and all related matters including matters relevant to the formulation of a plan of reorganization. Questioning should not be allowed to deteriorate to a level constituting harassment or to focus on the dischargeability of a particular debt. Parties who wish to examine the debtor regarding dischargeability of particular debts or regarding other matters beyond the scope of the examination should be advised to consider alternate means of discovery. In re Nixon Elec. Supply, Inc., 85 B.R. 988 (Bankr. W.D. Tex. 1988). A section 341(a) examination is not a substitute for discovery in connection with an adversary proceeding.

3-5.5 - CONDUCTING THE MEETING

The United States Trustee presides at the meeting. 11 U.S.C. § 341(a). The United States Trustee includes any designee of the United States Trustee. 11 U.S.C. § 102(9) and Fed. R. Bankr. P. 9001(11). The meeting must be recorded electronically or transcribed by a court reporter. The tape or record of the meeting must be preserved by the United States Trustee and be available for public access until two years after the conclusion of the meeting. At an entity's request, the United States Trustee shall provide a copy or transcript of the recordings at the entity's expense. Fed. R. Bankr. P. 2003(c). The presiding officer should make an introductory statement. A suggested introductory statement is: My name is _____. I am an (attorney/analyst/etc.) in the Office of the United States Trustee, a component of the United States Department of Justice. The United States Trustee supervises the administration of bankruptcy cases under the Bankruptcy Code. The debtor is required to appear and to be examined under oath regarding the bankruptcy case. The examination will be recorded. All persons questioning the debtor must state their names and indicate who they represent. An appearance sheet will be circulated. If you wish to receive notice of any adjourned meeting, you must fill out the appearance sheet. The presiding officer should state the case name and number and the date and time of the meeting, and should inform creditors that they will be given an opportunity to ask questions of the debtor. Appearances should be noted on the record, particularly the appearance of counsel representing the debtor or other parties in the case. Debtors or debtors' representatives should be asked to raise their right hands so that the oath or affirmation can be administered as follows: Do you swear or affirm to tell the truth, the whole truth, and nothing but the truth? The presiding officer has the authority to administer oaths or affirmations. There is no requirement that the presiding officer be a notary. 11 U.S.C. § 343; Fed. R. Bankr. P. 2003(b)(1) and 9012. The United States Trustee should respond only to inquiries regarding administrative or procedural matters. The United States Trustee should never give legal advice at the section 341 meeting, but should refer parties with legal questions to their attorneys.

3-5.6 - QUESTIONING THE DEBTOR

The United States Trustee should review the debtor's schedules and statements and other documents in the file prior to the section 341 meeting. The person questioning the debtor should also confer with the person who conducted the IDI and review information and report from the IDI. Examination of the file may provide answers to questions that might otherwise be asked or may disclose additional areas of inquiry. The United States Trustee may also request that the debtor bring specific documents to the meeting and follow up on information required and not produced at the IDI. The examination conducted by the United States Trustee should be flexible, incisive, and responsive to the circumstances of the proceeding and the case. The examination should be sufficiently detailed so that the United States Trustee has an understanding of the debtor's business and its operations. The meeting also provides the opportunity to remind debtors of their duties and to question them regarding compliance with those duties, such as filing operating reports and the payment of United States Trustee quarterly fees. The United States Trustee should take notes of the meeting and maintain a written record either in the form of a minute report or memo to the file in the case file. The United States Trustee should obtain the spelling of the names of parties in the event a transcript of the meeting is requested at a later date. Creditors and other parties in interest must also be given an opportunity to ask questions and examine the debtor. See In re Kincaid, 146 B.R. 387 (Bankr. W.D. Tenn. 1992). The Federal Rules of Evidence do not apply to examinations conducted at a section 341 meeting and objections predicated upon those rules should not be entertained. However, the presiding officer must maintain control over the proceeding and preserve the professional atmosphere and decorum appropriate to the situation.

3-5.7 - ATTENDANCE BY CREDITORS, THE MEDIA, AND THE PUBLIC

Meetings are open to the public, except that the court may not attend. 11 U.S.C. § 341(c). Representatives of the media are permitted to be present, but not to televise or photograph the proceedings or to ask questions at the meeting. See In re Astri Inv., Management and Sec. Corp., 88 B.R. 730 (D. Md. 1988). Only those entities identified in 11 U.S.C. § 343, e.g., creditors, any indenture trustee, any trustee or examiner in the case, or the United States Trustee may examine the debtor. Debtors, creditors, indenture trustees, equity security holders, committees, or other parties may be represented by an authorized agent, attorney in fact, or proxy. Fed. R. Bankr. P. 9010(a).

3-5.8 - IMMUNITY, SELF-INCRIMINATION, AND REFUSAL TO ANSWER QUESTIONS

Immunity may be granted under part V of title 18 of the United States Code to persons required to submit to examination, to testify, or to provide information in a bankruptcy case. 11 U.S.C. § 344. The operative sections for granting immunity are 18 U.S.C. §§ 6002 and 6003. Pursuant to these sections, the debtor (or other witness) may refuse to testify based upon the privilege against self-incrimination, but may be compelled to do so under a grant of immunity from the United States Attorney. Hoffman v. United States, 341 U.S. 479 (1951); In re Save More Foods, Inc., 96 B.R. 1 (D.D.C. 1989); In re Hulon, 92 B.R. 670 (Bankr. N.D. Tex. 1988). Under the Bankruptcy Code, if the debtor testifies without claiming the privilege, it is waived. Once the debtor or another witness has claimed the privilege against self-incrimination, immunity may be granted only by order of the district court upon the request of the United States Attorney for the district in which the case was filed. 18 U.S.C. § 6003. If the debtor or another witness claims the privilege, this fact should (when appropriate) be reported to the United States Attorney. If the debtor or other witness is granted immunity by the United States Attorney, he/she can be required to testify. If the debtor asserts the Fifth Amendment privilege against self-incrimination in response to a question, the United States Trustee should proceed with the meeting and continue to question the debtor. A "blanket" assertion of the privilege is inappropriate and the debtor should be compelled to assert the privilege in response to each question propounded. A debtor's discharge may not be denied for properly invoking the privilege against self-incrimination. 11 U.S.C. § 727(a)(6)(c). United States v. Kras, 409 U.S. 434 (1973); In re Krohn, 886 F.2d 123 (6th Cir. 1989); In re French, 127 B.R. 434 (Bankr. D. Minn. 1991). See also In re McCormick, 49 F.3d 1524 (11th Cir. 1995) (confirmation of a chapter 11 debtor's plan of reorganization cannot be denied solely because the debtor invoked his Fifth Amendment privilege in an adversary proceeding). The failure to answer questions at a section 341 meeting, however, may be cause to dismiss or convert the case or to seek the appointment of a trustee. Cf. In re Connelly, 59 B.R. 421 (Bankr. N.D. Ill. 1986). Alternatively, the United States Trustee may seek an order from the court compelling the debtor to testify. If the debtor refuses to answer a question, the meeting should continue and, at the conclusion of the meeting, the parties should seek a resolution from the court. The presiding officer may, however, state for the record his/her opinion on the propriety of the question and whether or not it appears to fall within the permissible scope of examination. In addition, the United States Trustee may subsequently wish to appear in court and state a position on this issue. This is especially so in a case where the United States Trustee asked or would have asked the question, and it has a direct bearing on the ability of the United States Trustee to supervise the case because the debtor is making insufficient disclosure. The examination of the debtor in a chapter 11 case, as indicated by the legislative history, allows a broad inquiry into the debtor's financial condition, the operation of its business, the desirability of its continuance, and all related matters, including matters relevant to the formulation of a plan of reorganization. While this section requires that the debtor appear and submit to an examination at the meeting of creditors under 11 U.S.C. § 341(a), it should be noted that the debtor may be ordered to appear for examination upon specific request. 11 U.S.C. § 343; Fed. R. Bankr. P. 2004(a) and 4002(1).

3-5.9 - PROOFS OF CLAIM

A proof of claim must be filed with the clerk. However, if a creditor insists upon filing the proof of claim at the section 341 meeting, Fed. R. Bankr. P. 5005(c) establishes a procedure. The recipient, either the trustee or the United States Trustee, should note on the claim the date of receipt and transmit it forthwith to the clerk of the bankruptcy court.

3-5.10 - CONTINUANCES AND APPEARANCES

After notice of the section 341 meeting has been given, continuances should be granted rarely. If a request for a continuance is made, the United States Trustee may allow the request and continue the meeting if the continuance could not have been avoided. The party requesting the continuance must provide the debtor, the trustee (if any), all creditors and indenture trustees, as well as the clerk of the court, with notice of the continued date and time and provide the United States Trustee with proof of service of such notice. The failure of the debtor to file schedules is not cause to continue the meeting. The initial meeting should be held and adjourned until some date after the filing of the schedules. But see In re Vance, 120 B.R. 181 (Bankr. N.D. Okla. 1990). The debtor or a designated representative of a partnership or corporation must attend the section 341 meeting and submit to examination under oath. 11 U.S.C. § 343; In re Steinmetz Group, Ltd., 85 B.R. 633 (Bankr. S.D. Fla. 1988). The person appearing on behalf of the debtor should be an official who is prepared to respond effectively to the examination. If a chapter 11 trustee has been appointed, the trustee would give a report and be examined. When spouses have filed a joint petition, they must both be present. If only one debtor appears, the United States Trustee may elect to examine the attending debtor and continue the section 341 meeting for the examination of the other. If requiring the other debtor to appear for examination would cause extreme hardship and there are no objections from creditors, the United States Trustee should obtain necessary information from the attending debtor. (This allowance may vary depending on local court rule.) However, if any creditor present wishes to examine the absent debtor, a continuation must be granted and the absent debtor required to attend. With respect to hearing-impaired debtors, the United States Trustee must take appropriate steps to ensure effective communication and must furnish appropriate auxiliary aids where necessary to afford a handicapped person an equal opportunity to participate. 28 C.F.R. § 39.160(a)(1); see USTM 3-5.12. The services of foreign language interpreters may also be required. The interpreter must be placed under oath. If the debtor or debtor's representative fails to appear at the meeting, the United States Trustee may either continue the meeting, file a motion for an order of the court designating a person to attend the meeting on behalf of the partnership or corporate debtor pursuant to Fed. R. Bankr. P. 9001(5), file a motion for the appointment of a trustee, or file a motion to convert or dismiss the case. The provisions of Fed. R. Bankr. P. 2005 may also be used to apprehend the debtor and compel his/her attendance at the meeting. When a debtor's attorney fails to appear, the debtor may either choose to proceed with the examination without representation or request a continuance. The decision on whether to grant a continuance should be based upon a review of the following conditions: Whether the reason for non-attendance is one that rendered appearance impossible, e.g., illness or sudden emergency, or whether non-attendance merely involved a scheduling conflict. Whether the United States Trustee was notified in advance of the non-appearance. Whether creditors appearing at the section 341 meeting traveled a great distance and how any were in attendance. Whether the particular attorney has failed to attend previous section 341 meetings for other debtors. The continued date should be announced to all parties in attendance. The United States Trustee may file a motion under 11 U.S.C. § 329(b) to compel turnover or refund of the fees received by an attorney who repeatedly fails to appear without justification.

3-5.11 - ADJOURNMENTS AND SPECIAL MEETINGS

Fed. R. Bankr. P. 2003(e) provides that "[t]he meeting may be adjourned from time to time by announcement at the meeting of the adjourned date and time without further written notice." If no further information is necessary, the meeting should be concluded. Any adjournment of the meeting and the length of time of any adjournment will be determined after taking into consideration such matters as the need to examine the debtor, the necessity to resolve matters that are still open at the conclusion of the prior meeting, and the need to monitor closely the particular case. At the conclusion of the section 341 meeting, an announcement should be made by the United States Trustee regarding the date and time of the next meeting, unless later written notification will be made. Where no further notice will be given, the attendees should be so notified. Fed. R. Bankr. P. 4003(b) provides that a trustee or creditor may file objections to claimed exemptions within 30 days after the conclusion of the section 341 meeting. Adjournment of the meeting may improperly impede an individual debtor's right to establish his/her exemptions, unless bsp; the court fixes a date certain to object to such claimed exemptions. In re Vance, 120 B.R. 181 (Bankr. N.D. Okla. 1990). The United States Trustee may call a special meeting of creditors on request of a party in interest or nbsp; on the United States Trustee's own initiative pursuant to Fed. R. Bankr. P. 2003(f). Special meetings may be called to address a situation that has come to the United States Trustee's attention and requires close supervision. The United States Trustee should notify all appropriate parties in interest of the date, time, and location of the special meeting.

3-5.12 - CONDUCT OF SECTION 341 MEETINGS FOR HEARING-IMPAIRED DEBTORS

Part 39 of the Code of Federal Regulations, entitled "Enforcement of Non-Discrimination on the Basis of Handicap in Programs or Activities Conducted by the Department of Justice," prohibits discrimination on the basis of handicap (including impaired hearing) in activities conducted by the Department of Justice. 28 C.F.R. § 39.130. Since section 341 meetings are "activities" of the United States Trustee conducted under the authority of 11 U.S.C. § 341, the regulation applies. Because the regulation prohibits discrimination "directly or through contractual, licensing, or other arrangements," (28 C.F.R. § 39.130(b)(1)), chapter 11 trustees who conduct section 341 meetings under authority derived from the United States Trustee are also bound by the regulation. For hearing-impaired persons, the regulation states: (a) The agency shall take appropriate steps to ensure effective communication with applicants, participants, personnel of other Federal entities, and members of the public. (l)The agency shall furnish appropriate auxiliary aids where necessary to afford a handicapped person an equal opportunity to participate in, and enjoy the benefits of, a program or activity conducted by the agency. 28 C.F.R. § 39.160(a)(1). The auxiliary aids mentioned have been defined in the regulation as ". . . interpreters, notetakers, written materials, and other similar services and devices." 28 C.F.R. § 39.103. The United States Trustee must provide auxiliary aids at no cost to the handicapped person. Depending on the expected length and complexity of the section 341 meeting and the preference of the hearing-impaired debtor, there are two primary methods that can be employed in order to ensure effective communication. They are: The provision of a notepad and written questions. This method is recommended if a paucity of questions and questioners are expected or if the hearing-impaired person cannot or prefers not to communicate using sign language. When employing this method, it is advisable to inform creditors in advance of this procedure and to request that they bring written questions to the section 341 meeting. An announcement on the use of the procedure should be made at the beginning of the meeting. The debtor should be properly sworn in writing using the same oath customarily given at section 341 meetings. Prior to the completion of the hearing, questions to the debtor and the debtor's responses should be read into the record. Additionally, the written questions and responses should be attached to the United States Trustee's proceeding memorandum. This method has the advantage of being relatively inexpensive and produces a "hard" copy of the exchange to which the debtor can be held accountable. The disadvantage is that it may be very time consuming. The provision of a sign language interpreter. This method is recommended particularly if a long or complex section 341 meeting is anticipated or if the hearing-impaired debtor strongly prefers to communicate his/her response using sign language. If the hearing-impaired debtor requests that the United States Trustee provide an interpreter, the United States Trustee should assist the debtor in requesting a list of certified sign language interpreters from the clerk of the United States district court where the bankruptcy is filed. This request should be made pursuant to 28 U.S.C. § 1827(c)(1). The debtor should be instructed to choose an interpreter from the list, and the United States Trustee should assist the debtor in contacting the interpreter. The cost of the interpreter's services shall be paid by the United States Trustee through the use of the Government VISA card or a VISA check. See USTM 6-15. At the section 341 meeting, the interpreter should be sworn that they will accurately and truthfully translate from English to sign language the questions to the debtor and from sign language to English the responses from the debtor. The United States Trustee should then swear in the debtor via the interpreter. The primary advantage of using an interpreter is that it promotes a quick exchange between the debtor and the questioners. The disadvantage is the expense and the possibility of an inaccurate translation.

3-5.13 - FOREIGN LANGUAGE INTERPRETERS

If the debtor cannot speak English well enough to understand the questions asked at the section 341 meeting, an interpreter should be provided. Usually the expense will be charged to the Program's expense funds. The United States Trustee should make sure that the interpreter understands enough business and bankruptcy terminology to be able to obtain intelligent and meaningful responses to the questions. The interpreter should be sworn at the start of this inquiry.

3-5.14 - SECURITY AT SECTION 341 MEETINGS

Each leased section 341 meeting site should meet minimum GSA security requirements as determined by the Facilities Management Division of the Executive Office when the property is leased. Duress alarms are generally provided, and all persons presiding at section 341 meetings should be trained in their use. If the United States Trustee is made aware in advance that there may be security problems at a particular meeting, the United States Marshal's Service should be notified. It may also be possible to request that the debtor in possession hire security guards to be present at the meeting to deter potential security problems.