4-7.1 OVERVIEW

If there is an insufficient number of cases to warrant the appointment of a standing trustee under 28 U.S.C. § 586(b), the United States Trustee should appoint a disinterested person to serve as a trustee in each chapter 12 or chapter 13 case pursuant to 11 U.S.C. §§ 1202(a) and 1302(a). A case specific appointment may also be necessary in situations where a standing trustee has a conflict of interest. If the caseload increases, the United States Trustee should consider the appointment of another standing trustee. An individual appointed on a case-by-case basis needs court approval to receive compensation and reimbursement of actual and necessary expenses from each case pursuant to 11 U.S.C. §§ 326(b) and 330. Supervision of the trustee by the United States Trustee requires the same level of scrutiny as applies to all trustees generally.

4-7.2 RECRUITMENT AND SELECTION

4-7.2.1 Selection

The United States Trustee selects and appoints an individual as a case-by-case trustee under chapter 12 or 13.

4-7.2.2 Qualifications and Eligibility

The same qualifications, procedures, and eligibility requirements that apply to individuals appointed to administer chapter 7 cases apply to those appointed to administer individual chapter 12 or 13 cases. A background investigation is required unless the individual has a current clearance as a panel or standing trustee. The individual must be disinterested and must reside or have an office in the judicial district or an adjacent judicial district to where the case was filed. The individual must also post a bond.

4-7.2.3 Required Paperwork

A copy of the appointment and background investigation forms must be forwarded within five days of the appointment of a case-by-case trustee to the Assistant Director for Review and Oversight.

4-7.3 OVERSIGHT OF CASE-BY-CASE TRUSTEES

4-7.3.1 Bank Accounts, Bonding, and Collateralization

A case-by-case trustee is to maintain a separate bank account for each estate administered. The United States Trustee is to receive a statement of account activity on a monthly or quarterly basis from the financial institution where estate monies are maintained.

The United States Trustee shall ensure that the financial institution has posted adequate securities with the Federal Reserve Bank or has provided an appropriate bond so that the monies on deposit are collateralized in accordance with 11 U.S.C. § 345. The United States Trustee shall also ensure that the trustee is bonded. A case specific bond may be appropriate.

4-7.3.2 Annual Evaluation

A trustee administering individual cases under chapters 12 and 13 shall be evaluated on an annual basis following the same general criteria that apply to standing trustees:

1. The timeliness and quality of the trustee's reports.
2. The trustee's conduct of the meeting of creditors pursuant to 11 U.S.C.
   § 341.
3. The substantive administration of estates, including the quality of advocacy in court and legal pleadings.
4. A review of all complaints or lawsuits filed against the trustee.
5. The trustee's responsiveness to audits.
6. The adequacy of bonding.

The evaluation shall be documented and provided to the trustee.

4-7.3.3 Reporting

A case-by-case trustee shall provide the United States Trustee a monthly or quarterly report which details the receipts and disbursements of each case under his/her administration in the format prescribed by the United States Trustee.

On an annual basis, the United States Trustee shall submit to the Assistant Director for Review and Oversight a report containing the following information:

1. Name of trustee assigned to a case.
2. Case/debtor name.
3. Case number.
4. Date filed.
5. If confirmed, date of confirmation.
6. The year the case is scheduled for completion.
7. Receipts during the reporting year.
8. Disbursements during the reporting year.
9. The amount of funds on hand at the end of the reporting year.

The report is due for case-by-case trustees administering chapter 12 estates on February 15, and for case-by-case trustees administering chapter 13 estates on November 15.

4-7.3.4 Audits

A trustee administering individual chapter 12 or 13 cases shall receive a biannual audit. The audit may be conducted by an independent audit firm, the Inspector General, or the United States Trustee.