Procedures for Completing Uniform Forms of Trustee Final Reports in Cases Filed Under Chapters 7, 12, and 13 of the Bankruptcy Code, 58438-58445 [E8-23700]
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Alternative Methods of Compliance
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Application of Section 409A to
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(l)(1) The Manager, Wichita ACO, FAA,
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ACO, 1801 Airport Road, Room 100, MidContinent Airport, Wichita, Kansas 67209;
telephone (316) 946–4116; fax (316) 946–
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Material Incorporated by Reference
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Issued in Renton, Washington, on
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Michael Kaszycki,
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[FR Doc. E8–23400 Filed 10–6–08; 8:45 am]
26 CFR Part 1
[TD 9321]
RIN 1545–BE79
Internal Revenue Service (IRS),
Treasury.
ACTION: Correcting amendment.
AGENCY:
SUMMARY: This document contains
corrections to final regulations (TD
9321) which were published in the
Federal Register on April 17, 2007 (72
FR 19323), corrected July 31, 2007 (72
FR 41620) and September 24, 2007 (72
FR 54945). The final regulations relate
to section 409A and nonqualified
deferred compensation plans.
DATES: This correction is effective
October 7, 2008.
Applicability date: April 17, 2007.
FOR FURTHER INFORMATION: Guy R.
Traynor, (202) 622–3693 (not a toll-free
number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are subject
to this document are under section
409A of the Internal Revenue Code.
Need for Correction
As published, the correcting
amendment of September 24, 2008 (72
FR 54945) to final regulations (TD 9321)
contains errors that may prove to be
misleading and is in need of
clarification.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Correction of Publication
Accordingly, 26 CFR part 1 is
corrected by making the following
correcting amendment.
■
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read as follows:
■
Authority: 26 U.S.C. 7805 * * *
■ Par. 2. Section 1.409A–6(a)(3)(i), the
third sentence is corrected to read as
follows:
BILLING CODE 4910–13–P
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Internal Revenue Service
§ 1.409A–6 Application of section 409A
and effective dates.
*
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(a) * * *
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(3) * * *
(i) Nonaccount balance plans. * * *
For purposes of calculating the present
value of a benefit under this paragraph
(a)(3)(i), reasonable actuarial
assumptions and methods must be used.
* * *
*
*
*
*
*
Guy R. Traynor,
Federal Register Liaison, Legal Processing
Division, Associate Chief Counsel (Procedure
and Administration).
[FR Doc. E8–23652 Filed 10–6–08; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF JUSTICE
28 CFR Part 58
[Docket No: EOUST 101]
RIN 1105–AB29
Procedures for Completing Uniform
Forms of Trustee Final Reports in
Cases Filed Under Chapters 7, 12, and
13 of the Bankruptcy Code
Executive Office for United
States Trustees (EOUST), Justice.
ACTION: Final rule.
AGENCY:
SUMMARY: The Department of Justice,
through its component, EOUST, is
issuing this final rule (rule) pursuant to
Section 602 of the Bankruptcy Abuse
Prevention and Consumer Protection
Act of 2005 (BAPCPA).1 The BAPCPA
requires the Department to issue rules
requiring uniform forms for final reports
(Uniform Forms) by trustees in cases
under chapters 7, 12, and 13 of title 11.
The BAPCPA requires the rule to strike
the best achievable practical balance
between (1) the reasonable needs of the
public for information about the
operational results of the Federal
bankruptcy system, (2) economy,
simplicity, and lack of undue burden on
persons with a duty to file these reports,
and (3) appropriate privacy concerns
and safeguards.
DATES: Effective Date: This rule is
effective April 1, 2009.
ADDRESSES: Executive Office for United
States Trustees (EOUST), 20
Massachusetts Ave., NW., 8th Floor,
Washington, DC 20530.
FOR FURTHER INFORMATION CONTACT:
Ramona Elliott, General Counsel, or
Larry Wahlquist, Office of General
Counsel, at (202) 307–1399 (not a tollfree number).
SUPPLEMENTARY INFORMATION: On
February 4, 2008 at 73 FR 6447, the
Department published a proposed rule
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on this topic. Before the comment
period closed on April 4, 2008, EOUST,
within the Department, received
comments from 71 commenters. The
comments received and EOUST’s
responses are discussed below. This
final rule finalizes the proposed rule
with changes that reduce the burden on
trustees.
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Discussion
The administration of all chapter 7,
12, and 13 bankruptcy cases is entrusted
to private persons who are trustees
under the supervision and oversight of
a regional United States Trustee.2 As
distinguished from trustees, United
States Trustees are employees of the
Department of Justice.
In every case, a trustee must file with
the court and submit to the United
States Trustee a final report and final
account of his or her case
administration. The United States
Trustee reviews these reports and they
are then filed with the court.
While the trustee final report forms
currently used across the country
essentially serve the same purpose and
convey the same information, the format
of the forms and required attachments,
and even the names of the forms, can be
different. In fact, there are over a
hundred different versions of these
forms in use throughout the country.
With the passage of BAPCPA, Congress
directed the Attorney General to draft
rules creating nationally uniform forms
for trustee final reports. The Attorney
General delegated this authority to the
Director, Executive Office for United
States Trustees. In response to this
congressional mandate, the Director
publishes this rule, which requires
trustees to utilize nationally uniform
final report forms rather than the local
forms currently in effect. This rule does
not impose requirements on the general
public; it imposes requirements only
upon trustees who are supervised by
United States Trustees. UST Forms 101–
7–TFR, 101–7–NFR, 101–7–TDR, 101–
7–NDR, 101–12–FR–S, 101–13–FR–S,
101–12–FR–C, and 101–13–FR–C 3 are
the final report Uniform Forms required
by this rule. The information required
by these forms is set forth in section
58.7 in the amendatory text below.
These Uniform Forms will facilitate the
review of a trustee’s case
2 The United States Trustee Program does not
operate in Alabama and North Carolina. Therefore,
United States Trustees do not supervise trustees in
these two states.
3 TFR (Trustee’s Final Report); NFR (Notice of
Trustee’s Final Report); TDR (Trustee’s Final
Account and Distribution Report); NDR (Trustee’s
Report of No Distribution) FR-S (Standing Trustee’s
Final Report and Account) FR-C (Case Trustee’s
Final Report and Account).
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administration, which will assist in
maintaining the public’s trust in the
bankruptcy system. In addition, these
reports, once filed in a case, will be
available to the general public at the
office of the clerk of the United States
Bankruptcy Court where a case is
pending during the hours established by
the bankruptcy court clerk. Members of
the public should contact individual
United States Bankruptcy Courts to
obtain information about the policies
and procedures for inspection of final
reports filed in any particular case.
Final reports in cases are also available
through the Internet by accessing the
Electronic Case Filing System under
PACER at www.pacer.psc.uscourts.gov.
These Uniform Forms shall be filed
via the United States Bankruptcy Courts
Case Management/Electronic Case
Filing System (CM/ECF) as a ‘‘smart
form’’ that has been approved by
EOUST unless the court offers an
automated process, such as the virtual
event through CM/ECF described below.
A smart form is a document that is data
enabled. When it is saved into the
industry standard Portable Document
Format (PDF), stored data tags are then
available for extraction and searching.
This is contrary to a form that is not
data-enabled, where the PDF is simply
an image of the form and data is not
uniformly available for searching. The
data-enabled form builds upon the
existing Adobe PDF/A standard
(Version 1.4). Specifically, the standard
incorporates the use of XMP metadata or
Acroform field and value (F/V) tags
within an Adobe PDF document. The
current data schema (DTD) is found on
www.usdoj.gov/ust. Trustees may obtain
these ‘‘smart form’’ Uniform Forms from
their vendor of trustee case management
software. Members of the public may
obtain blank Uniform Forms from each
United States Trustee field office or
from EOUST’s Web site at
www.usdoj.gov/ust.
Regarding UST Form 101–7–NDR
(used for ‘‘no asset’’ cases), the
Administrative Office of the United
States Courts (AOUSC) is enhancing the
courts’ CM/ECF system to allow for the
filing of this form as a virtual docket
event. After a local court adopts this
enhancement, trustees will be able to
complete the UST Form 101–7–NDR as
a virtual entry form electronically via
the court’s CM/ECF system in lieu of
filing an attached PDF. In addition, the
CM/ECF system is being designed to
collect pertinent NDR data elements and
automatically include them with the
virtual NDR event, to the extent the data
is collected. This will significantly
streamline the process for trustees since
they will not have to enter additional
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data in most cases. Based upon
representations by AOUSC, this
enhancement will be included in CM/
ECF version 3.3, which is scheduled to
be released to the bankruptcy courts in
September of 2008. Given the above
release date, and based on past practice,
it is reasonable to anticipate that
bankruptcy courts will implement
version 3.3 by or before March 2009.
Therefore, EOUST makes this rule
effective April 1, 2009. However, some
cases filed within 60 days prior to the
rule’s effective date may not be filed
under the courts’ new CM/ECF version
3.3, which will collect the pertinent
data elements for the virtual NDR. To
prevent confusion and undue burden,
trustees are not required to manually
enter the information for the NDR for
cases filed within 60 days prior to this
rule’s effective date.
The usage of these Uniform Forms
will accomplish Congress’ mandate to
develop nationally uniform forms for
trustee final reports as directed in the
BAPCPA. The Uniform Forms will also
assist policy-makers, scholars, and the
public to better understand the
bankruptcy system. Instead of many
different versions of trustee final
reports, trustees throughout the country
will use the same eight forms. This will
greatly assist consumers in being able to
understand the administration of
bankruptcy cases, especially when a
consumer is located in a different region
from where the bankruptcy case is
located. Additionally, the information
from the Uniform Forms may be
nationally aggregated, which will assist
Congress in compiling data to accurately
analyze bankruptcy trends when making
policy decisions. Scholars and members
of the public may also be able to obtain
aggregate data with the necessary
software.
Summary of Changes in Final Rule
The final rule differs from the
proposed rule in the following ways:
First, UST Form 101–7–NDR has been
modified from an Adobe PDF document
to make it a virtual entry form that
trustees can complete electronically in
the court’s docket. Additionally, via the
court’s CM/ECF virtual event, multiple
NDR forms can be filed with the court
simultaneously in batch mode format.
These changes will significantly reduce
the burden on trustees in completing the
NDR. Second, the penalty of perjury
language has been deleted from the
NDR. Third, when trustees file the NDR
in cases that have been converted and
funds collected, the certification has
been altered to read, ‘‘all funds have
been returned or transferred to the
successor trustee.’’ Fourth, the trustee
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certification in UST Form 101–7–TFR
that all tax returns have been filed has
been deleted.
Discussion of Public Comments
EOUST received 71 comments on the
proposed rule, many of which had
several sub-comments within them.
EOUST has considered each comment
carefully and appreciates the time and
effort required to prepare and submit
each comment. EOUST’s responses to
the comments are discussed below and
are organized according to the structure
provided in the Uniform Forms.
A. General Comments
1. General Questions About Completing
the Uniform Forms
Comment: Several comments had
specific questions about how to
complete the Uniform Forms, such as
whether the phrase in the Uniform
Forms ‘‘assets abandoned’’ refers to the
specific assets or their monetary value,
and whether the phrase ‘‘claims
discharged without payment’’ refers to
the balance amount of claims unpaid or
claims for which no payment was made.
Response: The phrase ‘‘assets
abandoned’’ refers to the monetary
amount of the assets abandoned. The
phrase ‘‘claims discharged without
payment’’ refers to both the balance
amount of unpaid claims and allowed
claims for which no payment was made.
Answers to questions such as these
about how to complete the Uniform
Forms and the meaning of terms or
phrases are contained in the
instructions that accompany the forms.
The instructions are available on
EOUST’s Web site at www.usdoj.gov/
ust.
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2. Trustee Compensation
Comment: Several comments stated
that trustees are only paid $60 for noasset cases and that this compensation
for no-asset cases has not increased in
several years, and that it is unfair to
require trustees to do extra work
without additional compensation. Three
of the comments stated it is especially
unfair when debtors file in forma
pauperis.
Response: EOUST recognizes that
BAPCPA requires additional work by
trustees without corresponding
compensation and that compensation
for no-asset cases has not increased for
several years. However, the authority to
increase trustees’ compensation is
vested with Congress.
3. Entities Affected by the Rule
Comment: One comment stated the
rule affects courts and others in addition
to trustees.
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Response: This comment is correct;
the rule does affect more entities that
just trustees. However, the rule imposes
requirements only upon trustees and not
upon the general public or upon the
courts.
virtual text entry NDR to incorporate the
new data required by BAPCPA. The new
virtual entry NDR will be automatically
populated in most cases.
4. Costs to the Government
Comment: One comment questioned
whether the costs identified in the
section entitled Executive Order 12866
included costs to the judiciary.
Response: The costs to the
government identified in the rule reflect
only those costs to EOUST.
Comment: Many comments stated that
the NDR did not sufficiently balance the
needs of the public for information with
the burden upon trustees as required by
the BAPCPA.
Response: With the development of
the virtual entry NDR form, the burden
upon trustees is greatly reduced. In most
cases, the NDR form will be populated
by an automated process and trustees
may also file multiple NDR forms in
batch file method. Accordingly, the
needs of the public for information and
the burden upon trustees appear now to
be appropriately balanced.
5. Number of Cases
Comment: One comment stated that
some trustees close more than 500 cases
per year.
Response: The 500 cases per year
figure was an average number of cases.
EOUST recognizes that some trustees
close more than 500 cases per year and
that some trustees close fewer than 500
cases per year.
6. Data-enabled Court Forms for Pro Se
Debtors
Comment: One comment stated that
courts should ensure pro se debtors use
data enabled court forms and provide
the means necessary for them to do so.
Response: Only the Judicial
Conference of the United States is
authorized to mandate requirements
regarding the format of bankruptcy court
documents and whether to require pro
se debtors to use data enabled court
forms.
B. UST Form 101–7–NDR
7. Discussion of Public Comments
EOUST received 71 comments on the
proposed rule, many of which had
several sub-comments within them.
EOUST has considered each comment
carefully and appreciates the time
Substantial Increase in Burden.
Comment: Many comments stated that
the NDR form will substantially increase
trustees’ costs and workload, and is an
undue burden upon trustees.
Response: EOUST recognizes that the
NDR will impose a significant burden
upon trustees and has worked with
AOUSC to reduce this burden.
Accordingly, EOUST and AOUSC have
developed a virtual entry NDR form that
will greatly reduce the burden upon
trustees.
8. Automated NDR
Comment: Many comments stated that
EOUST should not implement the rule
until the NDR can be generated by a
more automated process.
Response: EOUST has worked closely
with AOUSC to modify the current
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9. Balancing of Public Need vs. Burden
Upon Trustees
10. Economic Impact
Comment: Many comments stated that
the economic impact of the NDR is
understated and will actually cost
trustees more money than EOUST
anticipated.
Response: This issue is now moot
with the development of the virtual
entry NDR.
11. Penalty of Perjury
Comment: Many comments stated that
EOUST does not have the authority to
require the NDR to be filed under
penalty of perjury.
Response: EOUST has removed the
requirement to file the NDR under
penalty of perjury because the NDR will
be a virtual-text entry.
12. Relying Upon Debtors’ Schedules
Comment: Many comments stated that
the NDR does not provide guidance on
whether trustees may rely solely upon
debtors’ schedules when completing the
NDR.
Response: Trustees may rely upon
debtors’ schedules. In the Instructions
that EOUST will post on its Web site,
EOUST explains that trustees may rely
solely upon the schedules submitted by
debtors.
13. Time To Complete NDR
Comment: Many comments stated that
the estimated 10 minutes to complete
the NDR is understated and that it will
actually take longer.
Response: This issue is now moot
with the development of the virtual
entry NDR.
14. Value of Information
Comment: Several comments stated
that there is little value in the
information gathered from the NDR and
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that the statistics will be invalid or
duplicative.
Response: The NDR will enable
Congress, academics, and the general
public to better understand the
bankruptcy process and what happens
in a no-asset bankruptcy case. For
instance, the amounts of abandoned
assets and claims scheduled to be
discharged without payment will be
available on a national basis.
15. Government Clerk Capturing Data
From NDR
Comment: Several comments stated
that a government clerk could capture
the information from the NDR rather
than trustees.
Response: This issue is now moot
with the development of the virtual
entry NDR. However, it should be noted
that Congress mandated trustees, not
government clerks, to file final reports.
16. Out of Business
Comment: Several comments stated
that increased costs associated with the
NDR may drive trustees out of business.
Response: This issue is now moot
with the development of the virtual
entry NDR.
17. Staff To Input Information
Comment: A few comments stated
that not all trustees have staff to input
information for the NDR and that it will,
therefore, be more costly for them.
Response: This issue is now moot
with the development of the virtual
entry NDR.
18. Review of Impact of NDR
Comment: Three comments stated
that the NDR should not be
implemented until its impact upon
trustees has been further studied.
Response: Since the virtual entry NDR
will now be implemented, there is no
need to delay its implementation to
study the effect of the Adobe PDF NDR.
19. Batch Filing
documents. However, AOUSC has
worked with EOUST to develop a
virtual entry NDR, which will greatly
reduce the burden on trustees in
completing the NDR.
converted to read in part, ‘‘all funds
have been returned or transferred to the
successor trustee.’’
21. Number of Bankruptcy Cases
Comment: Two comments stated that
EOUST should not rely upon the
decreasing number of bankruptcy cases
as a basis for imposing the NDR since
bankruptcy cases will probably increase.
Response: EOUST did not rely upon
the number of bankruptcy cases filed as
a basis for creating the NDR. Congress
mandated creation of uniform forms for
trustee final reports in the BAPCPA,
now codified at 28 U.S.C. 589b. It is this
statutory mandate from Congress that
EOUST relied upon in developing the
NDR.
Comment: One comment stated that
the NDR may not meet with courts’
requirements.
Response: EOUST has worked with
AOUSC in developing the virtual entry
NDR to respond to courts’ concerns.
Therefore, it should meet courts’
requirements.
22. Simplify NDR
Comment: Two comments stated that
EOUST may simplify the NDR and still
discharge its statutory duties.
Response: EOUST has simplified the
NDR by working with AOUSC to
develop the virtual entry NDR.
23. Timing of Filing NDR
Comment: One comment stated that
EOUST should require the new NDR be
filed only in cases where the current
virtual text entry NDR is not filed 90
days from the date the petition was filed
or 45 days after conclusion of the
creditors’ meeting.
Response: This issue is now moot
with the development of the virtual
entry NDR.
24. Uniformity
Comment: One comment questioned
how the NDR can be uniform when
debtors in some states may use state
exemptions, which can vary.
Response: Congress mandated the
usage of uniform trustee final reports.
Varying state exemptions will not alter
the uniformity of the NDR form.
20. Data Enabled Forms
25. Virtual Entry NDR
Comment: One comment stated that
EOUST should issue a rule authorizing
the current practice of filing virtual
entry NDR forms for no-asset cases.
Response: EOUST has developed, in
conjunction with AOUSC, a virtual
entry NDR for no-asset cases.
Comment: Three comments stated
that implementation of the NDR should
be delayed until bankruptcy
practitioners were mandated to use data
enabled bankruptcy court forms.
Response: Only the Judicial
Conference of the United States is
authorized to mandate requirements
regarding the format of bankruptcy court
26. Rewording of NDR
Comment: One comment questioned
whether it is appropriate to require
trustees to certify on the NDR that ‘‘all
funds have been returned’’ in cases
which are converted and funds have
been collected.
Response: EOUST has modified the
trustee certification for cases that were
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Comment: Three comments stated
that the NDR should not be
implemented until a batch filing method
is approved.
Response: Trustees may utilize batch
filing with the virtual entry NDR.
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27. Courts’ Requirements
28. Pilot Program
Comment: One comment stated a pilot
program should be utilized before
making the NDR mandatory in all
districts.
Response: The virtual entry NDR
eliminates the need for a pilot program.
29. Funding
Comment: One comment stated that
Congress should provide funding to
enable EOUST to collect the information
in the NDR rather than requiring
trustees to do so.
Response: This issue is now moot
with the development of the virtual
entry NDR.
30. Data Transmission
Comment: One comment questioned
whether EOUST has considered
whether the information from the NDR
could be transmitted directly from the
courts to EOUST.
Response: The BAPCPA requires
trustees to file final reports in every
bankruptcy case; EOUST and AOUSC
have worked together to simplify the
transmission of information.
31. Require Uniform Forms in No-asset
Cases Only
Comment: One comment stated that
the proposed NDR report fails to balance
economy with the burden on the trustee.
The comment pointed out that the
current practice was simply to file a
‘‘report of no distribution,’’ containing
no data, in place of a ‘‘formal final
report,’’ and asks that this practice be
continued.
Response: The comment correctly
identifies the current practice. However,
the Bankruptcy Code requires a ‘‘final
report’’ in all chapter 7 cases. Section
589b now sets forth the specific data
required in a chapter 7 final report and
does not distinguish between ‘‘asset’’
and ‘‘no asset’’ cases. EOUST cannot
balance economy and burden by simply
ignoring the statutory requirement to
provide specific data in all chapter 7
final reports.
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C. UST Form 101–7–TFR
32. Certification of Tax Returns
Comment: Many comments stated that
the requirement that a certification that
all tax returns have been filed is
impractical and unnecessary.
Response: EOUST concurs and has
removed this certification from the TFR.
33. Simplify TFR
Comment: One comment stated that
the TFR form should be simplified.
Response: The TFR has already been
simplified as much as it can be and still
maintain the necessary information for
one to understand the trustee’s
administration of the case and proposed
distribution of assets.
34. Exhibit C
Comment: One comment stated that
Exhibit C was not provided as an
example of what information is
required.
Response: The required information is
clearly identified in the rule. Exhibit C
was designed to allow trustees the
greatest flexibility possible to file their
own version of claims analysis.
35. Rewording of TFR
Comment: One comment suggested
that in section 58.7, replacing the phrase
‘‘before the case may be closed’’ with
the phrase ‘‘in preparation for closing an
asset case.’’ This comment also
suggested replacing ‘‘bar date’’ with
‘‘deadline’’ in paragraph 6 of the TFR,
along with other various stylistic
changes.
Response: EOUST has adopted some
of the comment’s suggestions and
modified the rule and the TFR
accordingly. Specifically, section 58.7(a)
has been revised to read, ‘‘[a] chapter 7
trustee must complete UST Form 101–
7–TFR final report (TFR) in preparation
for closing an asset case * * *.’’
Paragraph six of the TFR now reads,
‘‘[t]he deadline for filing claims in this
case * * *.’’
D. UST Form 101–7–NFR
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36. Rewording NFR
Comment: One comment suggested
amending section 58.7(b) by substituting
‘‘the amounts specified in Fed. R. Bankr.
P. 2002(f)(8)’’ for ‘‘$1,500’’ to avoid the
need to update this rule if the
bankruptcy rule is changed.
Response: EOUST concurs and has
modified the rule accordingly.
37. Authority To Mandate Uniform NFR
Comment: One comment questioned
whether EOUST had authority to
promulgate a rule requiring a uniform
notice of a report. Additionally, this
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comment stated the form of the notice
may not meet with all courts’
requirements.
Response: The NFR is integrally
connected with the TFR and TDR. One
of the primary purposes for a trustee to
file a final report is to allow parties in
interest to review and comment on the
trustee’s administration of the case.
However, parties in interest do not
receive a copy of the final report; they
only receive the notice of the final
report. Therefore, it is very important
that this notice be adequate to inform
them of their rights and the trustee’s
proposed distribution of assets. EOUST
notes that AOUSC and EOUST currently
have a memorandum of understanding
that delineates the format of the NFR.
EOUST will work with the courts to
accommodate any procedural changes
needed to meet a local court’s
requirements.
38. Court Notice
Comment: One comment questioned
whether courts will notice the TFR and
application for compensation to
interested parties.
Response: Local court practice
governs who has the responsibility to
send the notice.
E. UST Form 101–7–TDR
39. Redundant Information
Comment: One comment stated that
the information required on the TDR is
redundant with the information
required on the TFR.
Response: The TFR concerns the
trustee’s proposed distribution, which
can change. The TDR is the report that
details the trustee’s final and actual
distribution. Therefore, it is necessary to
have the data, while similar, on both
reports.
40. Form 1
Comment: One comment questioned
the requirement to file same individual
property record that was submitted with
the TFR.
Response: EOUST recognizes that the
Form 1 filed with the TDR is essentially
the same Form 1 filed with the TFR.
However, it is useful to have the
trustee’s final account—the TDR—
contain a complete record of the
administration of the case, including the
disposition of property, as well as the
flow of funds, in one document. Since
the Form 1 is readily available in the
trustee’s own electronic records, it is a
minimal burden to include it with the
TDR.
41. Form 2
Comment: One comment questioned
the requirement to file receipts and
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disbursements on the TDR when it
would just show the debits to the
account of the checks issued per the
TFR; the bank statements submitted
with the TDR support this process.
Response: The Form 2 filed with the
TDR is different from the Form 2 filed
with the TFR in one important respect:
the Form 2 filed with the TDR shows
the actual distribution of funds. The
Form 2 filed with the TFR does not
contain that information, which is a
critical element of the final account.
Although the bank statements contain
the same information, they are not
always available in electronic form or
simple to summarize or categorize.
F. Chapters 12 and 13 Uniform Forms
42. Statistics—Value of Assets
Abandoned
Comment: One comment stated that
in many districts standing trustees do
not abandon assets; they merely consent
to the stay being lifted. Due to this
practice, the ‘‘value of assets abandoned
by court order’’ will yield invalid
statistics if it includes the value of
assets when the trustee consents to the
stay being lifted.
Response: Trustees in chapter 12 and
chapter 13 generally do not abandon
assets. However, a court may
occasionally direct a trustee to do so,
and then the trustee should enter the
value of the asset under this data
element. In the interests of setting a
uniform standard that is reasonable,
EOUST defined ‘‘assets abandoned,’’ for
purposes of reporting on the final
report, as those assets abandoned by a
court order pursuant to 11 U.S.C. 554(b).
This definition does not include
instances where a trustee consents to
the stay being lifted. Answers to
questions such as this about how to
complete the Uniform Forms and the
meaning of terms or phrases are
contained in the instructions that
accompany the forms. The instructions
are available on EOUST’s Web site at
www.usdoj.gov/ust.
43. Statistics—Value of Assets
Exempted
Comment: One comment stated that
the ‘‘value of assets exempted’’ will be
skewed since some debtors claim the
value of their exemptions as 100%
without stating a value.
Response: As required under the
BAPCPA, EOUST is attempting to
balance the reasonable needs of the
public for information with the need not
to unduly burden the standing trustees
who must file the final reports. In the
interests of setting a uniform standard
that is reasonable and would not require
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the standing trustee expending
significant additional resources, EOUST
defined assets exempted as the total
value of assets listed as exempt on the
debtor’s Schedule C, unless revised
pursuant to a court order.
44. Statistics—Claims Discharged
Without Payment
Comment: One comment stated that
the unsecured claims discharged
without payment will be skewed since
it is unclear whether the amount of
general unsecured claims discharged
without payment refers to amount of
claims filed and not paid or to amount
of claims scheduled and not paid.
Response: EOUST will post
Instructions on how to complete the
final report form on its Web site. Those
Instructions clarify that this element is
generally the total scheduled unsecured
claims plus non-scheduled unsecured
claims where a proof of claim was filed,
minus payments on unsecured claims,
with specified adjustments to that
amount.
45. Statistics—Debt Secured by Vehicle
Comment: One comment stated that
the debt secured by vehicles will be
unreliable since some debtors have
vehicles and other collateral securing
the loan.
Response: This comment raises a
valid point. EOUST will provide further
guidance on issues such as this in the
Instructions that will be posted on
EOUST’s Web site.
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46. Checks Clearing Bank
Comment: One comment stated that
the chapter 13 standing trustee’s final
report form needs to be modified to
allow for the possibility that when a
debtor converts from chapter 13 to
chapter 7, not all checks have cleared
the bank when the standing trustee files
the final report.
Response: EOUST will post
Instructions on how to complete the
final report form on its Web site. Those
Instructions clarify that this paragraph
may be altered to indicate that not all
checks have cleared the bank if the case
is converted to another chapter.
47. Questions
Comment: One comment had several
questions about how to complete the
final report.
Response: EOUST will post
Instructions on how to complete the
final report on its Web site. Also,
individuals may contact EOUST with
specific questions about the final report.
48. Cost of Report
Comment: One comment stated that it
will cost more than $7.00 to complete
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the report and that more staff may be
necessary.
Response: The estimated increase in
costs to the standing trustee of
approximately $7.00 per final report is
a blended rate based on discussions
with standing trustees. Some standing
trustees were already entering
scheduled claims information and
others were not. If the standing trustee
had not been entering scheduled claims
information, his or her additional costs
will be greater than the $7.00.
49. Differences Between Chapter 12 and
Chapter 13 Uniform Forms
Comment: One comment questioned
whether there were substantive
differences between the chapters 12 and
13 final reports. If not, then the
comment suggested combining the
forms.
Response: There are substantive
differences between the four proposed
final report forms. Separate forms are
required for case trustees and standing
trustees because the statutory authority
for appointing one or the other differs
and the difference is reflected in the
language of the final report forms.
Further, since chapter 12 and chapter 13
cases are governed by different chapters
of the Bankruptcy Code, the final report
forms must be separate in order to
reflect the correct statutory authority for
the information provided.
Executive Order 12866
This rule has been drafted and
reviewed in accordance with Executive
Order 12866, ‘‘Regulatory Planning and
Review’’ section 1(b), The Principles of
Regulation. This rule is a not a
‘‘significant regulatory action’’ as
defined by Executive Order 12866 and,
accordingly, this rule has not been
reviewed by the Office of Management
and Budget (OMB.)
The Department has also assessed
both the costs and benefits of this rule
as required by section 1(b)(6) and has
made a reasoned determination that the
benefits of this regulation justify its
costs. The costs considered in this
regulation include the time incurred by
private trustees to complete the Uniform
Forms. Since most of the information in
the chapter 7 Uniform Forms is already
collected in most districts, the
additional time required to collect the
requisite information and to complete
the Uniform Forms should be minimal.4
4 It is estimated that completion of the chapter 7
Uniform Forms will take approximately the same
amount of time as the current chapter 7 final
reports. Therefore, there should not be an
appreciable difference in costs to complete the
chapter 7 Uniform Forms as compared to current
chapter 7 final report forms.
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58443
In addition, the Uniform Forms will
be added to the trustee case
management software utilized by
chapter 7 trustees. This software is
provided to chapter 7 trustees by
various banks free of charge in exchange
for trustees depositing estate funds in
these banks. For chapter 12 and chapter
13 trustees, it is anticipated that an
increase in costs will be incurred due to
the usage of these chapters 12 and 13
Uniform Forms. However, any
associated cost will be an approved
administrative expense of a standing
trustee’s trust operation.5 It is estimated
that the cost to the government for
developing these Uniform Forms is
approximately $20,000. The estimated
cost to develop a system to store
information extracted from these forms,
and to analyze the data, is
approximately $650,000. Over the next
several years, the EOUST anticipates
utilizing base resources available for
information technology to meet the
costs associated with developing the
Uniform Forms and a system to store the
information extracted from the forms.
There will be no additional cost to the
government. In fact, this rule will
reduce the costs to the government of
compiling the information submitted by
private trustees. Since the Uniform
Forms will be data enabled, the current
system of manually compiling case
closing information will be replaced by
a less time intensive automated system.
The benefits of this rule include
establishing national uniformity in the
final reports submitted by trustees,
which will enable Congress, and the
general public, to obtain more detailed
information regarding bankruptcy cases
nationally. This rule will enable
Congress and the public to identify,
among other things, the amount of debt
scheduled in bankruptcy cases, the
percentage of claims paid to creditors,
the amount of debt discharged, and the
value of assets abandoned by trustees.
Executive Order 13132
This rule will not have a substantial
direct effect on the States, on the
relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government. Therefore, in
accordance with Executive Order 13132,
it is determined that this rule does not
have sufficient federalism implications
to warrant the preparation of a
Federalism Assessment.
5 Please see the Regulatory Flexibility Act section
for an explanation of the chapters 12 and 13
Uniform Forms costs.
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costs or prices; or significant adverse
effects on competition, employment,
investment, productivity, and
innovation; or on the ability of United
States-based companies to compete with
foreign-based companies in domestic
and export markets.
Paperwork Reduction Act
These forms are associated with an
open bankruptcy case. Therefore, the
exemption under 5 CFR 1320.4(a)(2)
applies.
Bankruptcy; Trusts and Trustees.
■ For the reasons set forth in the
preamble, 28 CFR Part 58 is amended as
set forth below:
Unfunded Mandates Reform Act of
1995
This rule does not require the
preparation of an assessment statement
in accordance with the Unfunded
Mandates Reform Act of 1995, 2 U.S.C.
1531. This rule does not include a
federal mandate that may result in the
annual expenditure by State, local, and
tribal governments, in the aggregate, or
by the private sector, of more than the
annual threshold established by the Act
($123 million in 2005, adjusted
annually for inflation). Therefore, no
actions were deemed necessary under
the provisions of the Unfunded
Mandates Reform Act of 1995.
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Regulatory Flexibility Act
In accordance with the Regulatory
Flexibility Act (5 U.S.C. 605(b)), the
Director has reviewed this rule and
certifies that none of the Uniform Forms
will have a significant economic impact
on a substantial number of small
entities. This rule imposes requirements
only upon approximately 1,400 trustees.
In addition, trustees already submit to
the court essentially the same
information as that required by this rule
though formats vary in judicial districts.
This rule simply creates uniform forms
for all trustees to use throughout the
country rather than local court forms.
For chapter 12 and chapter 13
trustees, it is estimated that there will be
an increase in costs in the amount of
approximately $7.00 per final report.
However, this is less than 1% of
chapters 12 and 13 trustees’ total
operating expenses. Chapters 12 and 13
standing trustees allocate this cost
toward an annual budget, which means
trustees deduct this cost from funds
disbursed from debtors’ estates to
creditors. Thus, the chapters 12 and 13
Uniform Forms will not have a
significant economic impact upon
standing trustees.6
PART 58—[AMENDED]
Small Business Regulatory Enforcement
Fairness Act of 1996
This rule is not a major rule as
defined by section 804 of the Small
Business Regulatory Enforcement
Fairness Act of 1996, 5 U.S.C. 801 et
seq. This rule will not result in an
annual effect on the economy of $100
million or more; a major increase in
6 Chapters 12 and 13 case trustees closed less
than .001% of chapters 12 and 13 cases in fiscal
year 2007.
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Privacy Act Statement
28 U.S.C. 589b authorizes the
collection of the information in the final
reports. As part of the trustee’s reporting
to the court, the United States Trustee,
and creditors concerning the trustee’s
administration of the bankruptcy estate,
the United States Trustee will review
the information contained in these
reports. The United States Trustee will
not share the information with any other
entity unless authorized under the
Privacy Act, 5 U.S.C. 552a et seq.
EOUST has published a System of
Records Notice that delineates the
routine use exceptions authorizing
disclosure of information. See 71 FR
59818, 59822 (Oct. 11, 2006), JUSTICE/
UST–002, ‘‘Bankruptcy Trustee
Oversight Records.’’ Providing this
information is mandatory under 11
U.S.C. 704.
List of Subjects in 28 CFR Part 58
1. The authority citation for Part 58 is
revised to read as follows:
■
Authority: 5 U.S.C. 301, 552; 11 U.S.C.
109(h), 111, 521(b), 727(a)(11), 1141(d)(3),
1202; 1302, 1328(g); 28 U.S.C. 509, 510, 586,
589b.
■
2. Add section 58.7 to read as follows:
§ 58.7 Procedures for Completing Uniform
Forms of Trustee Final Reports in Cases
Filed Under Chapters 7, 12, and 13 of the
Bankruptcy Code.
(a) UST Form 101–7–TFR, Chapter 7
Trustee’s Final Report. A chapter 7
trustee must complete UST Form 101–
7–TFR final report (TFR) in preparation
for closing an asset case. This report
must be submitted to the United States
Trustee after liquidating the estate’s
assets, but before making distribution to
creditors, and before filing it with the
United States Bankruptcy Court. The
TFR must contain the trustee’s
certification, under penalty of perjury,
that all assets have been liquidated or
properly accounted for and that funds of
the estate are available for distribution.
Pursuant to 28 U.S.C. 589b(d), the TFR
must also contain the following:
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(1) Summary of the trustee’s case
administration;
(2) Copies of the estate’s financial
records;
(3) List of allowed claims;
(4) Fees and administrative expenses;
and
(5) Proposed dividend distribution to
creditors.
(b) UST Form 101–7–NFR Chapter 7
Trustee’s Notice of Trustee’s Final
Report. After the TFR has been reviewed
by the United States Trustee and filed
with the United States Bankruptcy
Court, if the net proceeds realized in an
estate exceed the amounts specified in
Fed. R. Bankr. P. 2002(f)(8), UST Form
101–7–NFR (NFR) must be sent to all
creditors as the notice required under
Fed. R. Bankr. P. 2002(f). The NFR must
show the receipts, approved
disbursements, and any balance
identified on the TFR, as well as the
information required in the TFR’s
Exhibit D. In addition, the NFR must
identify the procedures for objecting to
any fee application or to the TFR.
(c) UST Form 101–7–TDR Chapter 7
Trustee’s Final Account, Certification
The Estate Has Been Fully Administered
and Application of Trustee To Be
Discharged. After distributing all estate
funds, a trustee must submit to the
United States Trustee and file with the
United States Bankruptcy Court the
trustee’s final account, UST Form 101–
7–TDR (TDR). The TDR must contain
the trustee’s certification, under penalty
of perjury, that the estate has been fully
administered and the trustee’s request to
be discharged as trustee. Pursuant to 28
U.S.C. 589b(d), the TDR must also
include the following:
(1) The length of time the case was
pending;
(2) Assets abandoned;
(3) Assets exempted;
(4) Receipts and disbursements of the
estate;
(5) Claims asserted;
(6) Claims allowed; and,
(7) Distributions to claimants and
claims discharged without payment, in
each case by appropriate category.
(d) UST Form 101–7–NDR Chapter 7
Trustee’s Report of No Distribution. In
cases where there is no distribution of
funds the case trustee must submit to
the United States Trustee and file with
the United States Bankruptcy Court UST
Form 101–7–NDR (NDR). The NDR must
contain the trustee’s certification that
the estate has been fully administered,
that the trustee has neither received nor
disbursed any property or money on
account of the estate, and that there is
no property available for distribution
over and above that exempted by law.
In addition, the NDR must set forth the
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trustee’s request to be discharged as
trustee. Pursuant to 28 U.S.C. 589b(d),
the NDR must also include the
following information:
(1) The length of time the case was
pending;
(2) Assets abandoned;
(3) Assets exempted;
(4) Claims asserted;
(5) Claims scheduled; and,
(6) claims scheduled to be discharged
without payment.
(e) UST Form 101–12–FR–S, Chapter
12 Standing Trustee’s Final Report and
Account and UST Form 101–13–FR–S,
Chapter 13 Standing Trustee’s Final
Report and Account. After the final
distribution to creditors in a chapter 12
or 13 case in which a standing trustee
has been appointed, a trustee must
submit to the United States Trustee and
file with the United States Bankruptcy
Court either UST Form 101–12–FR–S
for chapter 12 cases or UST Form 101–
13–FR–S for chapter 13 cases, which are
the trustee’s final report and account. In
these forms, a trustee must include a
certification that the estate has been
fully administered if not converted to
another chapter and a request to be
discharged as trustee. Pursuant to 28
U.S.C. 589b(d), these forms must also
include the following information:
(1) The length of time the case was
pending;
(2) Assets abandoned;
(3) Assets exempted;
(4) Receipts and disbursements of the
estate;
(5) Expenses of administration,
including for use under section 707(b),
actual costs of administering cases
under chapter 12 or 13 (as applicable)
of title 11;
(6) Claims asserted;
(7) Claims allowed;
(8) Distributions to claimants and
claims discharged without payment, in
each case by appropriate category;
(9) Date of confirmation of the plan;
(10) Date of each modification thereto;
and,
(11) Defaults by the debtor in
performance under the plan.
(f) UST Form 101–12–FR–C, Chapter
12 Case Trustee’s Final Report and
Account, and UST Form 101–13–FR–C,
Chapter 13 Case Trustee’s Final Report
and Account. After the final distribution
to creditors in a chapter 12 or 13 case
in which a case trustee has been
appointed, the trustee must submit to
the United States Trustee and file with
the United States Bankruptcy Court
either UST Form 101–12–FR–C for
chapter 12 cases, or UST Form 101–13–
FR–C for chapter 13 cases, which are the
trustee’s final report and account. In
these forms, a trustee must include a
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certification, submitted under penalty of
perjury, that the estate has been fully
administered if not converted to another
chapter and the trustee’s request to be
discharged from further duties as
trustee. Pursuant to 28 U.S.C. 589b(d),
these forms must also include the
following information:
(1) The length of time the case was
pending;
(2) Assets abandoned;
(3) Assets exempted;
(4) Receipts and disbursements of the
estate;
(5) Expenses of administration,
including for use under section 707(b),
actual costs of administering cases
under chapter 12 or 13 (as applicable)
of title 11;
(6) Claims asserted;
(7) Claims allowed;
(8) Distributions to claimants and
claims discharged without payment, in
each case by appropriate category;
(9) Date of confirmation of the plan;
(10) Date of each modification thereto;
and,
(11) defaults by the debtor in
performance under the plan.
(g) Mandatory Usage of Uniform
Forms. The Uniform Forms associated
with this rule must be utilized by
trustees when completing their final
reports and final accounts. All trustees
serving in districts where a United
States Trustee is serving must use the
Uniform Forms in the administration of
their cases, in the same manner, and
with the same content, as set forth in
this rule:
(1) All Uniform Forms may be
electronically or mechanically
reproduced so long as all the content
and the form remain consistent with the
Uniform Forms as they are posted on
EOUST’s Web site;
(2) The Uniform Forms shall be filed
via the United States Bankruptcy Courts
Case Management/Electronic Case
Filing System (CM/ECF) as a ‘‘smart
form’’ meaning the forms are data
enabled, unless the court offers an
automated process that has been
approved by EOUST, such as the virtual
NDR event through CM/ECF.
Dated: September 30, 2008.
Clifford J. White, III,
Director, Executive Office for United States
Trustees.
[FR Doc. E8–23700 Filed 10–6–08; 8:45 am]
BILLING CODE 4410–40–P
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58445
DEPARTMENT OF LABOR
Employee Benefits Security
Administration
29 CFR Part 2509
RIN 1210–AB22
Amendment to Interpretive Bulletin
95–1
Employee Benefits Security
Administration, Department of Labor.
ACTION: Final rule.
AGENCY:
SUMMARY: This document contains a
final rule that amends Interpretive
Bulletin 95–1 to limit the application of
the Bulletin to the selection of annuity
providers for defined benefit plans. Also
appearing in today’s Federal Register is
a final regulation, entitled ‘‘Selection of
Annuity Providers—Safe Harbor for
Individual Account Plans’’, which
establishes a safe harbor for the
selection of annuity providers for the
purpose of benefit distributions from
individual account plans covered by
title I of the Employee Retirement
Income Security Act (ERISA). The
amendment to Interpretive Bulletin 95–
1, as well as the safe harbor for annuity
selections, will affect plan sponsors and
fiduciaries of individual account plans,
and the participants and beneficiaries
covered by such plans.
DATES: This final rule is effective on
December 8, 2008.
FOR FURTHER INFORMATION CONTACT:
Janet A. Walters or Allison E. Wielobob,
Office of Regulations and
Interpretations, Employee Benefits
Security Administration, U.S.
Department of Labor, Washington, DC
20210, (202) 693–8510. This is not a
toll-free number.
SUPPLEMENTARY INFORMATION:
A. Background
In 1995, the Department issued
Interpretive Bulletin 95–1 (29 CFR
2509.95–1) (the IB), providing guidance
concerning the fiduciary standards
under Part 4 of Title I of ERISA
applicable to the selection of annuity
providers for purposes of pension plan
benefit distributions. In general, the IB
makes clear that the selection of an
annuity provider in connection with
benefit distributions is a fiduciary act
governed by the fiduciary standards of
section 404(a)(1), including the duty to
act prudently and solely in the interest
of the plan’s participants and
beneficiaries. In this regard, the IB
provides that plan fiduciaries must take
steps calculated to obtain the safest
annuity available, unless under the
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]]>Agencies
[Federal Register Volume 73, Number 195 (Tuesday, October 7, 2008)]
[Rules and Regulations]
[Pages 58438-58445]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-23700]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
28 CFR Part 58
[Docket No: EOUST 101]
RIN 1105-AB29
Procedures for Completing Uniform Forms of Trustee Final Reports
in Cases Filed Under Chapters 7, 12, and 13 of the Bankruptcy Code
AGENCY: Executive Office for United States Trustees (EOUST), Justice.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Justice, through its component, EOUST, is
issuing this final rule (rule) pursuant to Section 602 of the
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
(BAPCPA).\1\ The BAPCPA requires the Department to issue rules
requiring uniform forms for final reports (Uniform Forms) by trustees
in cases under chapters 7, 12, and 13 of title 11. The BAPCPA requires
the rule to strike the best achievable practical balance between (1)
the reasonable needs of the public for information about the
operational results of the Federal bankruptcy system, (2) economy,
simplicity, and lack of undue burden on persons with a duty to file
these reports, and (3) appropriate privacy concerns and safeguards.
---------------------------------------------------------------------------
\1\ Codified at 28 U.S.C. 589b.
---------------------------------------------------------------------------
DATES: Effective Date: This rule is effective April 1, 2009.
ADDRESSES: Executive Office for United States Trustees (EOUST), 20
Massachusetts Ave., NW., 8th Floor, Washington, DC 20530.
FOR FURTHER INFORMATION CONTACT: Ramona Elliott, General Counsel, or
Larry Wahlquist, Office of General Counsel, at (202) 307-1399 (not a
toll-free number).
SUPPLEMENTARY INFORMATION: On February 4, 2008 at 73 FR 6447, the
Department published a proposed rule
[[Page 58439]]
on this topic. Before the comment period closed on April 4, 2008,
EOUST, within the Department, received comments from 71 commenters. The
comments received and EOUST's responses are discussed below. This final
rule finalizes the proposed rule with changes that reduce the burden on
trustees.
Discussion
The administration of all chapter 7, 12, and 13 bankruptcy cases is
entrusted to private persons who are trustees under the supervision and
oversight of a regional United States Trustee.\2\ As distinguished from
trustees, United States Trustees are employees of the Department of
Justice.
---------------------------------------------------------------------------
\2\ The United States Trustee Program does not operate in
Alabama and North Carolina. Therefore, United States Trustees do not
supervise trustees in these two states.
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In every case, a trustee must file with the court and submit to the
United States Trustee a final report and final account of his or her
case administration. The United States Trustee reviews these reports
and they are then filed with the court.
While the trustee final report forms currently used across the
country essentially serve the same purpose and convey the same
information, the format of the forms and required attachments, and even
the names of the forms, can be different. In fact, there are over a
hundred different versions of these forms in use throughout the
country. With the passage of BAPCPA, Congress directed the Attorney
General to draft rules creating nationally uniform forms for trustee
final reports. The Attorney General delegated this authority to the
Director, Executive Office for United States Trustees. In response to
this congressional mandate, the Director publishes this rule, which
requires trustees to utilize nationally uniform final report forms
rather than the local forms currently in effect. This rule does not
impose requirements on the general public; it imposes requirements only
upon trustees who are supervised by United States Trustees. UST Forms
101-7-TFR, 101-7-NFR, 101-7-TDR, 101-7-NDR, 101-12-FR-S, 101-13-FR-S,
101-12-FR-C, and 101-13-FR-C \3\ are the final report Uniform Forms
required by this rule. The information required by these forms is set
forth in section 58.7 in the amendatory text below. These Uniform Forms
will facilitate the review of a trustee's case administration, which
will assist in maintaining the public's trust in the bankruptcy system.
In addition, these reports, once filed in a case, will be available to
the general public at the office of the clerk of the United States
Bankruptcy Court where a case is pending during the hours established
by the bankruptcy court clerk. Members of the public should contact
individual United States Bankruptcy Courts to obtain information about
the policies and procedures for inspection of final reports filed in
any particular case. Final reports in cases are also available through
the Internet by accessing the Electronic Case Filing System under PACER
at www.pacer.psc.uscourts.gov.
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\3\ TFR (Trustee's Final Report); NFR (Notice of Trustee's Final
Report); TDR (Trustee's Final Account and Distribution Report); NDR
(Trustee's Report of No Distribution) FR-S (Standing Trustee's Final
Report and Account) FR-C (Case Trustee's Final Report and Account).
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These Uniform Forms shall be filed via the United States Bankruptcy
Courts Case Management/Electronic Case Filing System (CM/ECF) as a
``smart form'' that has been approved by EOUST unless the court offers
an automated process, such as the virtual event through CM/ECF
described below. A smart form is a document that is data enabled. When
it is saved into the industry standard Portable Document Format (PDF),
stored data tags are then available for extraction and searching. This
is contrary to a form that is not data-enabled, where the PDF is simply
an image of the form and data is not uniformly available for searching.
The data-enabled form builds upon the existing Adobe PDF/A standard
(Version 1.4). Specifically, the standard incorporates the use of XMP
metadata or Acroform field and value (F/V) tags within an Adobe PDF
document. The current data schema (DTD) is found on www.usdoj.gov/ust.
Trustees may obtain these ``smart form'' Uniform Forms from their
vendor of trustee case management software. Members of the public may
obtain blank Uniform Forms from each United States Trustee field office
or from EOUST's Web site at www.usdoj.gov/ust.
Regarding UST Form 101-7-NDR (used for ``no asset'' cases), the
Administrative Office of the United States Courts (AOUSC) is enhancing
the courts' CM/ECF system to allow for the filing of this form as a
virtual docket event. After a local court adopts this enhancement,
trustees will be able to complete the UST Form 101-7-NDR as a virtual
entry form electronically via the court's CM/ECF system in lieu of
filing an attached PDF. In addition, the CM/ECF system is being
designed to collect pertinent NDR data elements and automatically
include them with the virtual NDR event, to the extent the data is
collected. This will significantly streamline the process for trustees
since they will not have to enter additional data in most cases. Based
upon representations by AOUSC, this enhancement will be included in CM/
ECF version 3.3, which is scheduled to be released to the bankruptcy
courts in September of 2008. Given the above release date, and based on
past practice, it is reasonable to anticipate that bankruptcy courts
will implement version 3.3 by or before March 2009. Therefore, EOUST
makes this rule effective April 1, 2009. However, some cases filed
within 60 days prior to the rule's effective date may not be filed
under the courts' new CM/ECF version 3.3, which will collect the
pertinent data elements for the virtual NDR. To prevent confusion and
undue burden, trustees are not required to manually enter the
information for the NDR for cases filed within 60 days prior to this
rule's effective date.
The usage of these Uniform Forms will accomplish Congress' mandate
to develop nationally uniform forms for trustee final reports as
directed in the BAPCPA. The Uniform Forms will also assist policy-
makers, scholars, and the public to better understand the bankruptcy
system. Instead of many different versions of trustee final reports,
trustees throughout the country will use the same eight forms. This
will greatly assist consumers in being able to understand the
administration of bankruptcy cases, especially when a consumer is
located in a different region from where the bankruptcy case is
located. Additionally, the information from the Uniform Forms may be
nationally aggregated, which will assist Congress in compiling data to
accurately analyze bankruptcy trends when making policy decisions.
Scholars and members of the public may also be able to obtain aggregate
data with the necessary software.
Summary of Changes in Final Rule
The final rule differs from the proposed rule in the following
ways: First, UST Form 101-7-NDR has been modified from an Adobe PDF
document to make it a virtual entry form that trustees can complete
electronically in the court's docket. Additionally, via the court's CM/
ECF virtual event, multiple NDR forms can be filed with the court
simultaneously in batch mode format. These changes will significantly
reduce the burden on trustees in completing the NDR. Second, the
penalty of perjury language has been deleted from the NDR. Third, when
trustees file the NDR in cases that have been converted and funds
collected, the certification has been altered to read, ``all funds have
been returned or transferred to the successor trustee.'' Fourth, the
trustee
[[Page 58440]]
certification in UST Form 101-7-TFR that all tax returns have been
filed has been deleted.
Discussion of Public Comments
EOUST received 71 comments on the proposed rule, many of which had
several sub-comments within them. EOUST has considered each comment
carefully and appreciates the time and effort required to prepare and
submit each comment. EOUST's responses to the comments are discussed
below and are organized according to the structure provided in the
Uniform Forms.
A. General Comments
1. General Questions About Completing the Uniform Forms
Comment: Several comments had specific questions about how to
complete the Uniform Forms, such as whether the phrase in the Uniform
Forms ``assets abandoned'' refers to the specific assets or their
monetary value, and whether the phrase ``claims discharged without
payment'' refers to the balance amount of claims unpaid or claims for
which no payment was made.
Response: The phrase ``assets abandoned'' refers to the monetary
amount of the assets abandoned. The phrase ``claims discharged without
payment'' refers to both the balance amount of unpaid claims and
allowed claims for which no payment was made. Answers to questions such
as these about how to complete the Uniform Forms and the meaning of
terms or phrases are contained in the instructions that accompany the
forms. The instructions are available on EOUST's Web site at
www.usdoj.gov/ust.
2. Trustee Compensation
Comment: Several comments stated that trustees are only paid $60
for no-asset cases and that this compensation for no-asset cases has
not increased in several years, and that it is unfair to require
trustees to do extra work without additional compensation. Three of the
comments stated it is especially unfair when debtors file in forma
pauperis.
Response: EOUST recognizes that BAPCPA requires additional work by
trustees without corresponding compensation and that compensation for
no-asset cases has not increased for several years. However, the
authority to increase trustees' compensation is vested with Congress.
3. Entities Affected by the Rule
Comment: One comment stated the rule affects courts and others in
addition to trustees.
Response: This comment is correct; the rule does affect more
entities that just trustees. However, the rule imposes requirements
only upon trustees and not upon the general public or upon the courts.
4. Costs to the Government
Comment: One comment questioned whether the costs identified in the
section entitled Executive Order 12866 included costs to the judiciary.
Response: The costs to the government identified in the rule
reflect only those costs to EOUST.
5. Number of Cases
Comment: One comment stated that some trustees close more than 500
cases per year.
Response: The 500 cases per year figure was an average number of
cases. EOUST recognizes that some trustees close more than 500 cases
per year and that some trustees close fewer than 500 cases per year.
6. Data-enabled Court Forms for Pro Se Debtors
Comment: One comment stated that courts should ensure pro se
debtors use data enabled court forms and provide the means necessary
for them to do so.
Response: Only the Judicial Conference of the United States is
authorized to mandate requirements regarding the format of bankruptcy
court documents and whether to require pro se debtors to use data
enabled court forms.
B. UST Form 101-7-NDR
7. Discussion of Public Comments
EOUST received 71 comments on the proposed rule, many of which had
several sub-comments within them. EOUST has considered each comment
carefully and appreciates the time Substantial Increase in Burden.
Comment: Many comments stated that the NDR form will substantially
increase trustees' costs and workload, and is an undue burden upon
trustees.
Response: EOUST recognizes that the NDR will impose a significant
burden upon trustees and has worked with AOUSC to reduce this burden.
Accordingly, EOUST and AOUSC have developed a virtual entry NDR form
that will greatly reduce the burden upon trustees.
8. Automated NDR
Comment: Many comments stated that EOUST should not implement the
rule until the NDR can be generated by a more automated process.
Response: EOUST has worked closely with AOUSC to modify the current
virtual text entry NDR to incorporate the new data required by BAPCPA.
The new virtual entry NDR will be automatically populated in most
cases.
9. Balancing of Public Need vs. Burden Upon Trustees
Comment: Many comments stated that the NDR did not sufficiently
balance the needs of the public for information with the burden upon
trustees as required by the BAPCPA.
Response: With the development of the virtual entry NDR form, the
burden upon trustees is greatly reduced. In most cases, the NDR form
will be populated by an automated process and trustees may also file
multiple NDR forms in batch file method. Accordingly, the needs of the
public for information and the burden upon trustees appear now to be
appropriately balanced.
10. Economic Impact
Comment: Many comments stated that the economic impact of the NDR
is understated and will actually cost trustees more money than EOUST
anticipated.
Response: This issue is now moot with the development of the
virtual entry NDR.
11. Penalty of Perjury
Comment: Many comments stated that EOUST does not have the
authority to require the NDR to be filed under penalty of perjury.
Response: EOUST has removed the requirement to file the NDR under
penalty of perjury because the NDR will be a virtual-text entry.
12. Relying Upon Debtors' Schedules
Comment: Many comments stated that the NDR does not provide
guidance on whether trustees may rely solely upon debtors' schedules
when completing the NDR.
Response: Trustees may rely upon debtors' schedules. In the
Instructions that EOUST will post on its Web site, EOUST explains that
trustees may rely solely upon the schedules submitted by debtors.
13. Time To Complete NDR
Comment: Many comments stated that the estimated 10 minutes to
complete the NDR is understated and that it will actually take longer.
Response: This issue is now moot with the development of the
virtual entry NDR.
14. Value of Information
Comment: Several comments stated that there is little value in the
information gathered from the NDR and
[[Page 58441]]
that the statistics will be invalid or duplicative.
Response: The NDR will enable Congress, academics, and the general
public to better understand the bankruptcy process and what happens in
a no-asset bankruptcy case. For instance, the amounts of abandoned
assets and claims scheduled to be discharged without payment will be
available on a national basis.
15. Government Clerk Capturing Data From NDR
Comment: Several comments stated that a government clerk could
capture the information from the NDR rather than trustees.
Response: This issue is now moot with the development of the
virtual entry NDR. However, it should be noted that Congress mandated
trustees, not government clerks, to file final reports.
16. Out of Business
Comment: Several comments stated that increased costs associated
with the NDR may drive trustees out of business.
Response: This issue is now moot with the development of the
virtual entry NDR.
17. Staff To Input Information
Comment: A few comments stated that not all trustees have staff to
input information for the NDR and that it will, therefore, be more
costly for them.
Response: This issue is now moot with the development of the
virtual entry NDR.
18. Review of Impact of NDR
Comment: Three comments stated that the NDR should not be
implemented until its impact upon trustees has been further studied.
Response: Since the virtual entry NDR will now be implemented,
there is no need to delay its implementation to study the effect of the
Adobe PDF NDR.
19. Batch Filing
Comment: Three comments stated that the NDR should not be
implemented until a batch filing method is approved.
Response: Trustees may utilize batch filing with the virtual entry
NDR.
20. Data Enabled Forms
Comment: Three comments stated that implementation of the NDR
should be delayed until bankruptcy practitioners were mandated to use
data enabled bankruptcy court forms.
Response: Only the Judicial Conference of the United States is
authorized to mandate requirements regarding the format of bankruptcy
court documents. However, AOUSC has worked with EOUST to develop a
virtual entry NDR, which will greatly reduce the burden on trustees in
completing the NDR.
21. Number of Bankruptcy Cases
Comment: Two comments stated that EOUST should not rely upon the
decreasing number of bankruptcy cases as a basis for imposing the NDR
since bankruptcy cases will probably increase.
Response: EOUST did not rely upon the number of bankruptcy cases
filed as a basis for creating the NDR. Congress mandated creation of
uniform forms for trustee final reports in the BAPCPA, now codified at
28 U.S.C. 589b. It is this statutory mandate from Congress that EOUST
relied upon in developing the NDR.
22. Simplify NDR
Comment: Two comments stated that EOUST may simplify the NDR and
still discharge its statutory duties.
Response: EOUST has simplified the NDR by working with AOUSC to
develop the virtual entry NDR.
23. Timing of Filing NDR
Comment: One comment stated that EOUST should require the new NDR
be filed only in cases where the current virtual text entry NDR is not
filed 90 days from the date the petition was filed or 45 days after
conclusion of the creditors' meeting.
Response: This issue is now moot with the development of the
virtual entry NDR.
24. Uniformity
Comment: One comment questioned how the NDR can be uniform when
debtors in some states may use state exemptions, which can vary.
Response: Congress mandated the usage of uniform trustee final
reports. Varying state exemptions will not alter the uniformity of the
NDR form.
25. Virtual Entry NDR
Comment: One comment stated that EOUST should issue a rule
authorizing the current practice of filing virtual entry NDR forms for
no-asset cases.
Response: EOUST has developed, in conjunction with AOUSC, a virtual
entry NDR for no-asset cases.
26. Rewording of NDR
Comment: One comment questioned whether it is appropriate to
require trustees to certify on the NDR that ``all funds have been
returned'' in cases which are converted and funds have been collected.
Response: EOUST has modified the trustee certification for cases
that were converted to read in part, ``all funds have been returned or
transferred to the successor trustee.''
27. Courts' Requirements
Comment: One comment stated that the NDR may not meet with courts'
requirements.
Response: EOUST has worked with AOUSC in developing the virtual
entry NDR to respond to courts' concerns. Therefore, it should meet
courts' requirements.
28. Pilot Program
Comment: One comment stated a pilot program should be utilized
before making the NDR mandatory in all districts.
Response: The virtual entry NDR eliminates the need for a pilot
program.
29. Funding
Comment: One comment stated that Congress should provide funding to
enable EOUST to collect the information in the NDR rather than
requiring trustees to do so.
Response: This issue is now moot with the development of the
virtual entry NDR.
30. Data Transmission
Comment: One comment questioned whether EOUST has considered
whether the information from the NDR could be transmitted directly from
the courts to EOUST.
Response: The BAPCPA requires trustees to file final reports in
every bankruptcy case; EOUST and AOUSC have worked together to simplify
the transmission of information.
31. Require Uniform Forms in No-asset Cases Only
Comment: One comment stated that the proposed NDR report fails to
balance economy with the burden on the trustee. The comment pointed out
that the current practice was simply to file a ``report of no
distribution,'' containing no data, in place of a ``formal final
report,'' and asks that this practice be continued.
Response: The comment correctly identifies the current practice.
However, the Bankruptcy Code requires a ``final report'' in all chapter
7 cases. Section 589b now sets forth the specific data required in a
chapter 7 final report and does not distinguish between ``asset'' and
``no asset'' cases. EOUST cannot balance economy and burden by simply
ignoring the statutory requirement to provide specific data in all
chapter 7 final reports.
[[Page 58442]]
C. UST Form 101-7-TFR
32. Certification of Tax Returns
Comment: Many comments stated that the requirement that a
certification that all tax returns have been filed is impractical and
unnecessary.
Response: EOUST concurs and has removed this certification from the
TFR.
33. Simplify TFR
Comment: One comment stated that the TFR form should be simplified.
Response: The TFR has already been simplified as much as it can be
and still maintain the necessary information for one to understand the
trustee's administration of the case and proposed distribution of
assets.
34. Exhibit C
Comment: One comment stated that Exhibit C was not provided as an
example of what information is required.
Response: The required information is clearly identified in the
rule. Exhibit C was designed to allow trustees the greatest flexibility
possible to file their own version of claims analysis.
35. Rewording of TFR
Comment: One comment suggested that in section 58.7, replacing the
phrase ``before the case may be closed'' with the phrase ``in
preparation for closing an asset case.'' This comment also suggested
replacing ``bar date'' with ``deadline'' in paragraph 6 of the TFR,
along with other various stylistic changes.
Response: EOUST has adopted some of the comment's suggestions and
modified the rule and the TFR accordingly. Specifically, section
58.7(a) has been revised to read, ``[a] chapter 7 trustee must complete
UST Form 101-7-TFR final report (TFR) in preparation for closing an
asset case * * *.'' Paragraph six of the TFR now reads, ``[t]he
deadline for filing claims in this case * * *.''
D. UST Form 101-7-NFR
36. Rewording NFR
Comment: One comment suggested amending section 58.7(b) by
substituting ``the amounts specified in Fed. R. Bankr. P. 2002(f)(8)''
for ``$1,500'' to avoid the need to update this rule if the bankruptcy
rule is changed.
Response: EOUST concurs and has modified the rule accordingly.
37. Authority To Mandate Uniform NFR
Comment: One comment questioned whether EOUST had authority to
promulgate a rule requiring a uniform notice of a report. Additionally,
this comment stated the form of the notice may not meet with all
courts' requirements.
Response: The NFR is integrally connected with the TFR and TDR. One
of the primary purposes for a trustee to file a final report is to
allow parties in interest to review and comment on the trustee's
administration of the case. However, parties in interest do not receive
a copy of the final report; they only receive the notice of the final
report. Therefore, it is very important that this notice be adequate to
inform them of their rights and the trustee's proposed distribution of
assets. EOUST notes that AOUSC and EOUST currently have a memorandum of
understanding that delineates the format of the NFR. EOUST will work
with the courts to accommodate any procedural changes needed to meet a
local court's requirements.
38. Court Notice
Comment: One comment questioned whether courts will notice the TFR
and application for compensation to interested parties.
Response: Local court practice governs who has the responsibility
to send the notice.
E. UST Form 101-7-TDR
39. Redundant Information
Comment: One comment stated that the information required on the
TDR is redundant with the information required on the TFR.
Response: The TFR concerns the trustee's proposed distribution,
which can change. The TDR is the report that details the trustee's
final and actual distribution. Therefore, it is necessary to have the
data, while similar, on both reports.
40. Form 1
Comment: One comment questioned the requirement to file same
individual property record that was submitted with the TFR.
Response: EOUST recognizes that the Form 1 filed with the TDR is
essentially the same Form 1 filed with the TFR. However, it is useful
to have the trustee's final account--the TDR--contain a complete record
of the administration of the case, including the disposition of
property, as well as the flow of funds, in one document. Since the Form
1 is readily available in the trustee's own electronic records, it is a
minimal burden to include it with the TDR.
41. Form 2
Comment: One comment questioned the requirement to file receipts
and disbursements on the TDR when it would just show the debits to the
account of the checks issued per the TFR; the bank statements submitted
with the TDR support this process.
Response: The Form 2 filed with the TDR is different from the Form
2 filed with the TFR in one important respect: the Form 2 filed with
the TDR shows the actual distribution of funds. The Form 2 filed with
the TFR does not contain that information, which is a critical element
of the final account. Although the bank statements contain the same
information, they are not always available in electronic form or simple
to summarize or categorize.
F. Chapters 12 and 13 Uniform Forms
42. Statistics--Value of Assets Abandoned
Comment: One comment stated that in many districts standing
trustees do not abandon assets; they merely consent to the stay being
lifted. Due to this practice, the ``value of assets abandoned by court
order'' will yield invalid statistics if it includes the value of
assets when the trustee consents to the stay being lifted.
Response: Trustees in chapter 12 and chapter 13 generally do not
abandon assets. However, a court may occasionally direct a trustee to
do so, and then the trustee should enter the value of the asset under
this data element. In the interests of setting a uniform standard that
is reasonable, EOUST defined ``assets abandoned,'' for purposes of
reporting on the final report, as those assets abandoned by a court
order pursuant to 11 U.S.C. 554(b). This definition does not include
instances where a trustee consents to the stay being lifted. Answers to
questions such as this about how to complete the Uniform Forms and the
meaning of terms or phrases are contained in the instructions that
accompany the forms. The instructions are available on EOUST's Web site
at www.usdoj.gov/ust.
43. Statistics--Value of Assets Exempted
Comment: One comment stated that the ``value of assets exempted''
will be skewed since some debtors claim the value of their exemptions
as 100% without stating a value.
Response: As required under the BAPCPA, EOUST is attempting to
balance the reasonable needs of the public for information with the
need not to unduly burden the standing trustees who must file the final
reports. In the interests of setting a uniform standard that is
reasonable and would not require
[[Page 58443]]
the standing trustee expending significant additional resources, EOUST
defined assets exempted as the total value of assets listed as exempt
on the debtor's Schedule C, unless revised pursuant to a court order.
44. Statistics--Claims Discharged Without Payment
Comment: One comment stated that the unsecured claims discharged
without payment will be skewed since it is unclear whether the amount
of general unsecured claims discharged without payment refers to amount
of claims filed and not paid or to amount of claims scheduled and not
paid.
Response: EOUST will post Instructions on how to complete the final
report form on its Web site. Those Instructions clarify that this
element is generally the total scheduled unsecured claims plus non-
scheduled unsecured claims where a proof of claim was filed, minus
payments on unsecured claims, with specified adjustments to that
amount.
45. Statistics--Debt Secured by Vehicle
Comment: One comment stated that the debt secured by vehicles will
be unreliable since some debtors have vehicles and other collateral
securing the loan.
Response: This comment raises a valid point. EOUST will provide
further guidance on issues such as this in the Instructions that will
be posted on EOUST's Web site.
46. Checks Clearing Bank
Comment: One comment stated that the chapter 13 standing trustee's
final report form needs to be modified to allow for the possibility
that when a debtor converts from chapter 13 to chapter 7, not all
checks have cleared the bank when the standing trustee files the final
report.
Response: EOUST will post Instructions on how to complete the final
report form on its Web site. Those Instructions clarify that this
paragraph may be altered to indicate that not all checks have cleared
the bank if the case is converted to another chapter.
47. Questions
Comment: One comment had several questions about how to complete
the final report.
Response: EOUST will post Instructions on how to complete the final
report on its Web site. Also, individuals may contact EOUST with
specific questions about the final report.
48. Cost of Report
Comment: One comment stated that it will cost more than $7.00 to
complete the report and that more staff may be necessary.
Response: The estimated increase in costs to the standing trustee
of approximately $7.00 per final report is a blended rate based on
discussions with standing trustees. Some standing trustees were already
entering scheduled claims information and others were not. If the
standing trustee had not been entering scheduled claims information,
his or her additional costs will be greater than the $7.00.
49. Differences Between Chapter 12 and Chapter 13 Uniform Forms
Comment: One comment questioned whether there were substantive
differences between the chapters 12 and 13 final reports. If not, then
the comment suggested combining the forms.
Response: There are substantive differences between the four
proposed final report forms. Separate forms are required for case
trustees and standing trustees because the statutory authority for
appointing one or the other differs and the difference is reflected in
the language of the final report forms. Further, since chapter 12 and
chapter 13 cases are governed by different chapters of the Bankruptcy
Code, the final report forms must be separate in order to reflect the
correct statutory authority for the information provided.
Executive Order 12866
This rule has been drafted and reviewed in accordance with
Executive Order 12866, ``Regulatory Planning and Review'' section 1(b),
The Principles of Regulation. This rule is a not a ``significant
regulatory action'' as defined by Executive Order 12866 and,
accordingly, this rule has not been reviewed by the Office of
Management and Budget (OMB.)
The Department has also assessed both the costs and benefits of
this rule as required by section 1(b)(6) and has made a reasoned
determination that the benefits of this regulation justify its costs.
The costs considered in this regulation include the time incurred by
private trustees to complete the Uniform Forms. Since most of the
information in the chapter 7 Uniform Forms is already collected in most
districts, the additional time required to collect the requisite
information and to complete the Uniform Forms should be minimal.\4\
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\4\ It is estimated that completion of the chapter 7 Uniform
Forms will take approximately the same amount of time as the current
chapter 7 final reports. Therefore, there should not be an
appreciable difference in costs to complete the chapter 7 Uniform
Forms as compared to current chapter 7 final report forms.
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In addition, the Uniform Forms will be added to the trustee case
management software utilized by chapter 7 trustees. This software is
provided to chapter 7 trustees by various banks free of charge in
exchange for trustees depositing estate funds in these banks. For
chapter 12 and chapter 13 trustees, it is anticipated that an increase
in costs will be incurred due to the usage of these chapters 12 and 13
Uniform Forms. However, any associated cost will be an approved
administrative expense of a standing trustee's trust operation.\5\ It
is estimated that the cost to the government for developing these
Uniform Forms is approximately $20,000. The estimated cost to develop a
system to store information extracted from these forms, and to analyze
the data, is approximately $650,000. Over the next several years, the
EOUST anticipates utilizing base resources available for information
technology to meet the costs associated with developing the Uniform
Forms and a system to store the information extracted from the forms.
There will be no additional cost to the government. In fact, this rule
will reduce the costs to the government of compiling the information
submitted by private trustees. Since the Uniform Forms will be data
enabled, the current system of manually compiling case closing
information will be replaced by a less time intensive automated system.
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\5\ Please see the Regulatory Flexibility Act section for an
explanation of the chapters 12 and 13 Uniform Forms costs.
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The benefits of this rule include establishing national uniformity
in the final reports submitted by trustees, which will enable Congress,
and the general public, to obtain more detailed information regarding
bankruptcy cases nationally. This rule will enable Congress and the
public to identify, among other things, the amount of debt scheduled in
bankruptcy cases, the percentage of claims paid to creditors, the
amount of debt discharged, and the value of assets abandoned by
trustees.
Executive Order 13132
This rule will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government. Therefore, in accordance with Executive Order
13132, it is determined that this rule does not have sufficient
federalism implications to warrant the preparation of a Federalism
Assessment.
[[Page 58444]]
Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act (5 U.S.C.
605(b)), the Director has reviewed this rule and certifies that none of
the Uniform Forms will have a significant economic impact on a
substantial number of small entities. This rule imposes requirements
only upon approximately 1,400 trustees. In addition, trustees already
submit to the court essentially the same information as that required
by this rule though formats vary in judicial districts. This rule
simply creates uniform forms for all trustees to use throughout the
country rather than local court forms.
For chapter 12 and chapter 13 trustees, it is estimated that there
will be an increase in costs in the amount of approximately $7.00 per
final report. However, this is less than 1% of chapters 12 and 13
trustees' total operating expenses. Chapters 12 and 13 standing
trustees allocate this cost toward an annual budget, which means
trustees deduct this cost from funds disbursed from debtors' estates to
creditors. Thus, the chapters 12 and 13 Uniform Forms will not have a
significant economic impact upon standing trustees.\6\
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\6\ Chapters 12 and 13 case trustees closed less than .001% of
chapters 12 and 13 cases in fiscal year 2007.
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Paperwork Reduction Act
These forms are associated with an open bankruptcy case. Therefore,
the exemption under 5 CFR 1320.4(a)(2) applies.
Unfunded Mandates Reform Act of 1995
This rule does not require the preparation of an assessment
statement in accordance with the Unfunded Mandates Reform Act of 1995,
2 U.S.C. 1531. This rule does not include a federal mandate that may
result in the annual expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector, of more than
the annual threshold established by the Act ($123 million in 2005,
adjusted annually for inflation). Therefore, no actions were deemed
necessary under the provisions of the Unfunded Mandates Reform Act of
1995.
Small Business Regulatory Enforcement Fairness Act of 1996
This rule is not a major rule as defined by section 804 of the
Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C.
801 et seq. This rule will not result in an annual effect on the
economy of $100 million or more; a major increase in costs or prices;
or significant adverse effects on competition, employment, investment,
productivity, and innovation; or on the ability of United States-based
companies to compete with foreign-based companies in domestic and
export markets.
Privacy Act Statement
28 U.S.C. 589b authorizes the collection of the information in the
final reports. As part of the trustee's reporting to the court, the
United States Trustee, and creditors concerning the trustee's
administration of the bankruptcy estate, the United States Trustee will
review the information contained in these reports. The United States
Trustee will not share the information with any other entity unless
authorized under the Privacy Act, 5 U.S.C. 552a et seq. EOUST has
published a System of Records Notice that delineates the routine use
exceptions authorizing disclosure of information. See 71 FR 59818,
59822 (Oct. 11, 2006), JUSTICE/UST-002, ``Bankruptcy Trustee Oversight
Records.'' Providing this information is mandatory under 11 U.S.C. 704.
List of Subjects in 28 CFR Part 58
Bankruptcy; Trusts and Trustees.
0
For the reasons set forth in the preamble, 28 CFR Part 58 is amended as
set forth below:
PART 58--[AMENDED]
0
1. The authority citation for Part 58 is revised to read as follows:
Authority: 5 U.S.C. 301, 552; 11 U.S.C. 109(h), 111, 521(b),
727(a)(11), 1141(d)(3), 1202; 1302, 1328(g); 28 U.S.C. 509, 510,
586, 589b.
0
2. Add section 58.7 to read as follows:
Sec. 58.7 Procedures for Completing Uniform Forms of Trustee Final
Reports in Cases Filed Under Chapters 7, 12, and 13 of the Bankruptcy
Code.
(a) UST Form 101-7-TFR, Chapter 7 Trustee's Final Report. A chapter
7 trustee must complete UST Form 101-7-TFR final report (TFR) in
preparation for closing an asset case. This report must be submitted to
the United States Trustee after liquidating the estate's assets, but
before making distribution to creditors, and before filing it with the
United States Bankruptcy Court. The TFR must contain the trustee's
certification, under penalty of perjury, that all assets have been
liquidated or properly accounted for and that funds of the estate are
available for distribution. Pursuant to 28 U.S.C. 589b(d), the TFR must
also contain the following:
(1) Summary of the trustee's case administration;
(2) Copies of the estate's financial records;
(3) List of allowed claims;
(4) Fees and administrative expenses; and
(5) Proposed dividend distribution to creditors.
(b) UST Form 101-7-NFR Chapter 7 Trustee's Notice of Trustee's
Final Report. After the TFR has been reviewed by the United States
Trustee and filed with the United States Bankruptcy Court, if the net
proceeds realized in an estate exceed the amounts specified in Fed. R.
Bankr. P. 2002(f)(8), UST Form 101-7-NFR (NFR) must be sent to all
creditors as the notice required under Fed. R. Bankr. P. 2002(f). The
NFR must show the receipts, approved disbursements, and any balance
identified on the TFR, as well as the information required in the TFR's
Exhibit D. In addition, the NFR must identify the procedures for
objecting to any fee application or to the TFR.
(c) UST Form 101-7-TDR Chapter 7 Trustee's Final Account,
Certification The Estate Has Been Fully Administered and Application of
Trustee To Be Discharged. After distributing all estate funds, a
trustee must submit to the United States Trustee and file with the
United States Bankruptcy Court the trustee's final account, UST Form
101-7-TDR (TDR). The TDR must contain the trustee's certification,
under penalty of perjury, that the estate has been fully administered
and the trustee's request to be discharged as trustee. Pursuant to 28
U.S.C. 589b(d), the TDR must also include the following:
(1) The length of time the case was pending;
(2) Assets abandoned;
(3) Assets exempted;
(4) Receipts and disbursements of the estate;
(5) Claims asserted;
(6) Claims allowed; and,
(7) Distributions to claimants and claims discharged without
payment, in each case by appropriate category.
(d) UST Form 101-7-NDR Chapter 7 Trustee's Report of No
Distribution. In cases where there is no distribution of funds the case
trustee must submit to the United States Trustee and file with the
United States Bankruptcy Court UST Form 101-7-NDR (NDR). The NDR must
contain the trustee's certification that the estate has been fully
administered, that the trustee has neither received nor disbursed any
property or money on account of the estate, and that there is no
property available for distribution over and above that exempted by
law. In addition, the NDR must set forth the
[[Page 58445]]
trustee's request to be discharged as trustee. Pursuant to 28 U.S.C.
589b(d), the NDR must also include the following information:
(1) The length of time the case was pending;
(2) Assets abandoned;
(3) Assets exempted;
(4) Claims asserted;
(5) Claims scheduled; and,
(6) claims scheduled to be discharged without payment.
(e) UST Form 101-12-FR-S, Chapter 12 Standing Trustee's Final
Report and Account and UST Form 101-13-FR-S, Chapter 13 Standing
Trustee's Final Report and Account. After the final distribution to
creditors in a chapter 12 or 13 case in which a standing trustee has
been appointed, a trustee must submit to the United States Trustee and
file with the United States Bankruptcy Court either UST Form 101-12-FR-
S for chapter 12 cases or UST Form 101-13-FR-S for chapter 13 cases,
which are the trustee's final report and account. In these forms, a
trustee must include a certification that the estate has been fully
administered if not converted to another chapter and a request to be
discharged as trustee. Pursuant to 28 U.S.C. 589b(d), these forms must
also include the following information:
(1) The length of time the case was pending;
(2) Assets abandoned;
(3) Assets exempted;
(4) Receipts and disbursements of the estate;
(5) Expenses of administration, including for use under section
707(b), actual costs of administering cases under chapter 12 or 13 (as
applicable) of title 11;
(6) Claims asserted;
(7) Claims allowed;
(8) Distributions to claimants and claims discharged without
payment, in each case by appropriate category;
(9) Date of confirmation of the plan;
(10) Date of each modification thereto; and,
(11) Defaults by the debtor in performance under the plan.
(f) UST Form 101-12-FR-C, Chapter 12 Case Trustee's Final Report
and Account, and UST Form 101-13-FR-C, Chapter 13 Case Trustee's Final
Report and Account. After the final distribution to creditors in a
chapter 12 or 13 case in which a case trustee has been appointed, the
trustee must submit to the United States Trustee and file with the
United States Bankruptcy Court either UST Form 101-12-FR-C for chapter
12 cases, or UST Form 101-13-FR-C for chapter 13 cases, which are the
trustee's final report and account. In these forms, a trustee must
include a certification, submitted under penalty of perjury, that the
estate has been fully administered if not converted to another chapter
and the trustee's request to be discharged from further duties as
trustee. Pursuant to 28 U.S.C. 589b(d), these forms must also include
the following information:
(1) The length of time the case was pending;
(2) Assets abandoned;
(3) Assets exempted;
(4) Receipts and disbursements of the estate;
(5) Expenses of administration, including for use under section
707(b), actual costs of administering cases under chapter 12 or 13 (as
applicable) of title 11;
(6) Claims asserted;
(7) Claims allowed;
(8) Distributions to claimants and claims discharged without
payment, in each case by appropriate category;
(9) Date of confirmation of the plan;
(10) Date of each modification thereto; and,
(11) defaults by the debtor in performance under the plan.
(g) Mandatory Usage of Uniform Forms. The Uniform Forms associated
with this rule must be utilized by trustees when completing their final
reports and final accounts. All trustees serving in districts where a
United States Trustee is serving must use the Uniform Forms in the
administration of their cases, in the same manner, and with the same
content, as set forth in this rule:
(1) All Uniform Forms may be electronically or mechanically
reproduced so long as all the content and the form remain consistent
with the Uniform Forms as they are posted on EOUST's Web site;
(2) The Uniform Forms shall be filed via the United States
Bankruptcy Courts Case Management/Electronic Case Filing System (CM/
ECF) as a ``smart form'' meaning the forms are data enabled, unless the
court offers an automated process that has been approved by EOUST, such
as the virtual NDR event through CM/ECF.
Dated: September 30, 2008.
Clifford J. White, III,
Director, Executive Office for United States Trustees.
[FR Doc. E8-23700 Filed 10-6-08; 8:45 am]
BILLING CODE 4410-40-P
