Procedures Governing Administrative Review of a United States Trustee's Decision To Deny a Chapter 12 or Chapter 13 Standing Trustee's Claim of Actual, Necessary Expenses, 31225-31230 [2011-12187]
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Federal Register / Vol. 76, No. 104 / Tuesday, May 31, 2011 / Rules and Regulations
Discussion of Comments
Notice of Proposed Special
Conditions no. 25–11–10–SC for the
Bombardier Model BD–700–1A10 and
BD–700–1A11 airplanes was published
in the Federal Register on March 28,
2011 (76 FR 17062). No comments were
received, and the special conditions are
adopted as proposed.
Applicability
As discussed above, these special
conditions are applicable to the
Bombardier Model BD–700–1A10 and
BD–700–1A11 airplanes. Should
Bombardier Inc. apply at a later date for
a change to the type certificate to
include another model incorporating the
same novel or unusual design feature,
the special conditions would apply to
that model as well.
Conclusion
This action affects only certain novel
or unusual design features on
Bombardier Model BD–700–1A10 and
BD–700–1A11 airplanes. It is not a rule
of general applicability.
List of Subjects in 14 CFR Part 25
Aircraft, Aviation safety, Reporting
and recordkeeping requirements.
The authority citation for these
special conditions is as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701,
44702, 44704.
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The Special Conditions
Accordingly, pursuant to the
authority delegated to me by the
Administrator, the following special
conditions are issued as part of the typecertification basis for Bombardier Model
BD–700–1A10 and BD–700–1A11
airplanes.
1. During any phase of flight in which
it is to be used, the SVS imagery on the
HUD must not degrade flight safety or
interfere with the effective use of
outside visual references for required
pilot tasks.
2. To avoid unacceptable interference
with the safe and effective use of the
pilot-compartment view, the SVS must
meet the following requirements:
a. The SVS design must minimize
unacceptable display characteristics or
artifacts (e.g., terrain shadowing against
a dark background) that obscure the
desired image of the scene, impair the
pilot’s ability to detect and identify
visual references, mask flight hazards,
distract the pilot, or otherwise degrade
task performance or safety.
b. Control of SVS image display
brightness must be sufficiently effective
in dynamically changing background
(ambient) lighting conditions to avoid
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pilot distraction, impairment of the
pilot’s ability to detect and identify
visual references, masking of flight
hazards, or to otherwise degrade task
performance or safety. If automatic
control for image brightness is not
provided, it must be shown that a
single, manual setting is satisfactory for
the range of lighting conditions
encountered during a time-critical, highworkload phase of flight (e.g., lowvisibility instrument approach).
c. A readily accessible control must be
provided that permits the pilot to
immediately deactivate and reactivate
display of the SVS image on demand,
without having to remove hands from
the flight controls and throttles.
d. The SVS image on the HUD must
not impair the pilot’s use of guidance
information, or degrade the presentation
and pilot awareness of essential flight
information displayed on the HUD, such
as alerts, airspeed, attitude, altitude and
direction, approach guidance,
windshear guidance, TCAS resolution
advisories, or unusual-attitude recovery
cues.
e. The SVS image and the HUD
symbols, which are spatially referenced
to the pitch scale, outside view, and
image, must be scaled and aligned (i.e.,
conformal) to the external scene. In
addition, the SVS image and the HUD
symbols—when considered singly or in
combination—must not be misleading,
cause pilot confusion, or increase
workload. Airplane attitudes or crosswind conditions may cause certain
symbols (e.g., the zero-pitch line or
flight-path vector) to reach field-of-view
limits, such that they cannot be
positioned conformally with the image
and external scene. In such cases, these
symbols may be displayed but with an
altered appearance that makes the pilot
aware that they are no longer displayed
conformally (for example, ‘‘ghosting’’).
The combined use of symbology and
runway image may not be used for path
monitoring when path symbology is no
longer conformal.
f. A HUD system used to display SVS
images must, if previously certified,
continue to meet all of the requirements
of the original approval.
3. The safety and performance of the
pilot tasks associated with the use of the
pilot-compartment view must be not be
degraded by the display of the SVS
image. These tasks include the
following:
a. Detection, accurate identification
and maneuvering, as necessary, to avoid
traffic, terrain, obstacles, and other
flight hazards.
b. Accurate identification and
utilization of visual references required
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31225
for every task relevant to the phase of
flight.
4. Appropriate limitations must be
stated in the Operating Limitations
section of the Airplane Flight Manual to
prohibit the use of the SVS for functions
that have not been found to be
acceptable.
Issued in Renton, Washington, on May 20,
2011.
Ali Bahrami,
Manager, Transport Airplane Directorate,
Aircraft Certification Service.
[FR Doc. 2011–13341 Filed 5–27–11; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF JUSTICE
28 CFR Part 58
[Docket No.: EOUST 103]
RIN 1105–AB16
Procedures Governing Administrative
Review of a United States Trustee’s
Decision To Deny a Chapter 12 or
Chapter 13 Standing Trustee’s Claim of
Actual, Necessary Expenses
Executive Office for United
States Trustees (‘‘EOUST’’), Justice.
ACTION: Final rule.
AGENCY:
This final rule (‘‘rule’’) sets
forth the procedures for a chapter 12 or
chapter 13 standing trustee (‘‘trustee’’)
to obtain administrative review of a
United States Trustee’s decision to deny
a trustee’s claim that certain expenses
are actual and necessary for the
administration of bankruptcy cases. The
Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005
(‘‘BAPCPA’’) requires that trustees
exhaust all administrative remedies
pertaining to a denial of a claim of
actual, necessary expenses before
seeking judicial review, and the
Attorney General prescribe procedures
for administrative review of such
denials. This rule ensures that the
process for administratively reviewing a
United States Trustee’s denial of a
trustee’s request for expenses is fair and
effective.
DATES: Effective Date: This rule is
effective June 30, 2011.
ADDRESSES: Executive Office for United
States Trustees (‘‘EOUST’’), 20
Massachusetts Ave., NW., 8th Floor,
Washington, DC 20530.
FOR FURTHER INFORMATION CONTACT:
Ramona D. Elliott, General Counsel, or
Larry Wahlquist, Office of General
Counsel, at (202) 307–1399 (not a tollfree number).
SUPPLEMENTARY INFORMATION: On August
14, 2009, at 74 FR 41,101, EOUST
SUMMARY:
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published a proposed rule on this topic.
Before the comment period closed on
October 13, 2009, EOUST received two
comments. The comments received and
EOUST’s responses are discussed
below.
Discussion
The administration of all chapter 12
and chapter 13 bankruptcy cases is
entrusted to private persons who are
case or standing trustees under the
supervision and oversight of a regional
United States Trustee. As distinguished
from case or standing trustees, United
States Trustees are employees of the
Department of Justice. A standing
trustee is appointed by the United States
Trustee under 28 U.S.C. 586 and
administers more than one chapter 12 or
chapter 13 case, as opposed to a case
trustee who is appointed under 11
U.S.C. 1202 or 11 U.S.C. 1302 and who
administers only the case to which the
trustee is appointed. This rule addresses
the right, conferred by the BAPCPA, of
a standing trustee to obtain
administrative review when the
trustee’s request for projected expenses,
referred to as a ‘‘claim of actual,
necessary expenses’’ in 28 U.S.C.
586(e)(3), is denied by the United States
Trustee.
When a debtor files for bankruptcy
relief under chapter 12 or chapter 13,
the debtor proposes a plan to pay his or
her creditors a percentage of the
amounts owed to creditors over a
specified period of time and obtains
court approval of this plan. This process
is termed confirming a chapter 12 or
chapter 13 plan. Once the bankruptcy
court confirms the plan, the trustee will
oversee the payment of creditors
pursuant to the plan. The debtor pays
plan payments to the trustee and the
trustee then disburses the appropriate
amounts to creditors.
As part of the process of
administering debtors’ cases, a trustee
incurs expenses. A trustee is authorized
to collect a specified percentage from
debtors’ plan payments to pay for these
expenses. However, before incurring
expenses, a trustee obtains approval
from the United States Trustee. As the
first step in obtaining United States
Trustee approval for expenses, the
United States Trustee requires that the
trustee submit a budget for the
anticipated expenses for the fiscal year.
The fiscal year for the chapter 12
standing trustee ends each June 30th;
the fiscal year for the chapter 13
standing trustee ends each September
30th. Next, these projected expenses are
evaluated by the United States Trustee
who will either approve the expenses or
require modifications to the proposed
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budget. Once the United States Trustee
approves the trustee’s budget, the
trustee is notified of this approval, and
pursuant to 28 U.S.C. 586(e), the
trustee’s compensation and a specified
percentage fee that the trustee may
collect from debtors’ plan payments are
authorized. This fee is to be used for
payment of the approved expenses
incurred during the fiscal year as well
as for the trustee’s compensation.
When a trustee realizes that expenses
for the current year might exceed the
approved amount, a trustee must submit
a request to the United States Trustee,
and obtain approval, before incurring
expenses above the approved amount.
This request must be submitted when
the increase to an individual expense
line item is greater than both 10% of the
budgeted amount and $5,000.00.
Expenses for certain items require prior
United States Trustee approval
regardless of amount. These expenses
currently are increases in the amount
budgeted for specified employee
expenses, increases in office lease
obligations, payments to the standing
trustee or relative of the standing
trustee, and expenses for any item not
originally contained in the approved
budget. This policy is set forth in the
Handbook for Chapter 13 Standing
Trustees which is posted on the
EOUST’s Web site and will be
incorporated in the revised Handbook
for Chapter 12 Standing Trustees. If any
other expenses are added to this list, the
United States Trustee will notify
trustees via e-mail or regular mail at
least 30 days before including the new
expenses in a revision to the Handbook.
If a trustee disagrees with the United
States Trustee’s denial of the trustee’s
proposed budget or request for
additional expenses, the trustee may
seek administrative review of the denial
under the procedures identified in this
rule. The Director of EOUST
(‘‘Director’’) will conduct a de novo
review of the United States Trustee’s
decision to determine whether the
record supports the United States
Trustee’s decision and whether the
decision was an appropriate exercise of
the United States Trustee’s discretion or
contrary to law.
With the passage of BAPCPA,
Congress directed the Attorney General
to prescribe procedures implementing
administrative review for trustees when
a claim of actual, necessary expenses is
denied. The Attorney General delegated
this authority to the Director. In
response to this congressional mandate,
the Director publishes this rule, which
establishes such procedures. This rule
imposes requirements only upon
standing trustees who are supervised by
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United States Trustees. In addition, this
rule addresses only the United States
Trustee’s denial of a trustee’s claim of
actual, necessary expenses. This rule
does not address the suspension or
termination of trustees. EOUST will
publish another notice of proposed
rulemaking that addresses the
suspension or termination of trustees
with a RIN number of 1105–AB12.
Summary of Changes in Final Rule
The final rule differs from the
proposed rule in the following ways:
• The administrative review process
has been expedited by shortening the
time for a trustee to request review by
the Director from 30 calendar days to 21
calendar days after receiving a notice of
denial of expenses from the United
States Trustee or after the expenses were
deemed denied. Similarly, the United
States Trustee’s time to respond to the
trustee’s request for review has been
shortened from 30 calendar days to 21
calendar days. These changes are
reflected in paragraphs (e) and (h).
• Paragraphs (c)(1), (c)(2), and (k)
have been revised to eliminate the
reference to ‘‘the deadline’’ so that the
review process cannot arbitrarily be
delayed by setting long deadlines when
the United States Trustee or the Director
seeks the submission of additional
information.
• Paragraph (i) has been revised to
include the word ‘‘non-privileged’’
before ‘‘information’’ in order to make it
consistent with paragraph (d) and so
that it is clear that the rule does not seek
to waive a trustee’s right to assert
traditional privileges.
• The rule has been revised to reflect
differences in chapter 12 and chapter 13
fiscal years.
Discussion of Public Comments
EOUST received two comments on
the proposed rule, one of which had
several sub-comments within it. 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.
1. Deadlines—Expediting the
Administrative Review Process
Comment: One comment expressed
concern that the time limits in the rule
allowed too much time to elapse before
a final decision by the Director must be
issued. The comment suggested
shortening the deadlines for various
stages during the administrative review
process. Specifically, the comment
recommended the United States Trustee
deny a budget line item no later than
October 10, the trustee appeal within 15
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days, the United States Trustee respond
within 10 days, and the Director issue
a decision within 90 days of the
trustee’s request for review.
Response: EOUST recognizes that the
administrative review process can be
lengthy at times and has revised the rule
to shorten the process as much as
possible. However, sufficient time must
be granted to the trustee, United States
Trustee, and the Director to perform
their respective duties to ensure a fair
and just resolution is accomplished. In
order to balance the competing interests
of a quick resolution with that of
obtaining the most equitable resolution
that is fair to all parties, EOUST has
modified some of the deadlines in the
rule. Although the comment did not
reference the time line for the chapter
12 trustee, the same concern would
exist. Specifically, the time for a trustee
to request review by the Director is
shortened from 30 calendar days to 21
calendar days from the date of the
United States Trustee’s notice of denial
or 21 calendar days from the date on
which the trustee’s expenses were
deemed denied by the United States
Trustee. Similarly, the United States
Trustee’s deadline for responding to the
trustee’s request for review has been
shortened from 30 calendar days to 21
calendar days.
EOUST has not, however, modified
the deadline for the United States
Trustee to issue a denial of a trustee’s
requested expenses—July 30 for chapter
12 standing trustee expenses and
October 31 for chapter 13 standing
trustee expenses. Though trustees are
generally required to submit a budget
delineating the trustee’s expenses by
May 1 for chapter 12 trustees and July
1 for chapter 13 trustees, this is not
always the case in every region, and
many trustees submit budgets after the
due date. In addition, it is not an
infrequent occurrence for a chapter 12
trustee to submit a budget after June 1
or a chapter 13 trustee to submit a
budget after September 1. When this
occurs, the United States Trustee must
have sufficient time to thoroughly
review the trustee’s proposed expenses.
Thus, in order to ensure the United
States Trustee has adequate time to
review every trustee’s expenses,
including those submitted late, EOUST
declines to modify the rule to require
the United States Trustee to issue a
denial by July 10 for chapter 12 trustees
and by October 10 for chapter 13
trustees.
2. Deadlines—Eliminating Delays for
Submission of Additional Information
Comment: One comment pointed out
that the language in the rule could
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significantly extend the time limits for
reaching a resolution. In paragraphs
(c)(1), (c)(2), and (k), the rule states that
if the United States Trustee or the
Director seeks additional information,
the time period for resolution or denial
is extended to 30 days beyond ‘‘the
deadline for submission of the
additional information.’’ The comment
stated this could be read to allow the
United States Trustee or the Director to
set a long deadline for the submission
of additional information, and thereby
delay the review process.
Response: EOUST concurs that these
paragraphs could be interpreted as the
comment indicated, though that was not
the intent. Accordingly, EOUST has
modified paragraphs (c)(1), (c)(2), and
(k) to eliminate the reference to ‘‘the
deadline’’ so that the review process
continues upon the submission of the
additional information and cannot
arbitrarily be delayed by setting long
deadlines for the submission of that
additional information.
3. Denying Expenses—Adding ‘‘Good
Cause’’ Justification
Comment: One comment
acknowledged that the rule does not
require the United States Trustee to
deny a trustee’s claim for expenses
when a trustee commits one of the
reasons for denial as enunciated in
paragraphs (b)(1) through (7), and that
the United States Trustee possesses
discretion to determine whether denial
is appropriate. However, the comment
advocated that the rule should include
a ‘‘good cause’’ provision so that the
United States Trustee may deny the
trustee’s claim for expenses only if the
trustee’s failure is without ‘‘good
cause.’’
Response: This change is unnecessary
and could potentially transfer the
burden of proof from the trustee to the
United States Trustee when
adjudicating a trustee’s request for
review. As the comment concedes, the
rule does not eliminate the United
States Trustee’s discretion to approve or
deny a trustee’s claim for expenses.
The rule was intentionally drafted
this way to provide the United States
Trustee with sufficient flexibility to
approve expenses, in appropriate
circumstances, even when a trustee
engages in one of the enumerated
reasons for denial. EOUST agrees that
the rule must have sufficient flexibility
to account for special circumstances,
such as the inability to obtain prior
approval of an expense due to a flood
or other natural disaster, which is
precisely why the rule provides the
United States Trustee with discretion. In
addition, the rule requires the United
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31227
States Trustee to communicate with the
trustee in an attempt to resolve any
dispute before issuing a notice of denial.
Thus, the trustee will have ample
opportunity to explain any reason or
‘‘good cause’’ to the United States
Trustee, necessitating the immediate
expenditures and which prevented the
trustee from obtaining prior approval of
such expenses.
As the rule is currently written, the
United States Trustee possesses the
discretion to deny a trustee’s claim for
expenses if the trustee engages in one of
the delineated reasons for denial (or
some similar reason). If an emergency
situation caused the trustee to commit
one of these failures, then the trustee
can explain the emergency to the United
States Trustee who may then decide that
the claim for expenses may be
approved. Or, if the United States
Trustee feels the emergency did not
warrant the trustee’s failure, then the
claim for expenses may be denied.
If the United States Trustee denies the
claim for expenses, then the trustee may
request the Director to review the
United States Trustee’s decision, and
may present the emergency situation to
the Director as a justifiable reason or
‘‘good cause.’’
The crucial point is that the trustee
has the opportunity to explain why an
emergency situation caused the trustee’s
failure and the United States Trustee
has the flexibility under the rule to
approve or disapprove depending on
what is most appropriate in the
individual circumstances. Because the
rule provides sufficient flexibility for
emergency situations as written, there is
no need to create a ‘‘good cause’’
provision. Moreover, the addition of a
’’good cause’’ exception may
inappropriately require the United
States Trustee to prove that the ‘‘good
cause’’ was insufficient to justify the
trustee’s failure before denying a claim
for expenses, effectively transferring the
burden of proving whether a trustee’s
failure was justified from the trustee to
the United States Trustee. EOUST
believes the trustee should bear the
burden of proof in demonstrating
whether a sufficient reason exists for
excusing the trustee’s failure.
Accordingly, EOUST declines to modify
the rule as proposed by the comment.
4. Privileged Documents
Comment: One comment pointed out
that paragraph (d) requires the United
States Trustee to provide ‘‘nonprivileged’’ documents to the Director
while paragraph (i) allows the Director
to seek ‘‘additional information from
any party.’’ The comment expressed
concern that the asymmetry between
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these two paragraphs could mean that
the rule intends to waive the trustee’s
right to assert traditional privileges.
Response: The asymmetry between
the two paragraphs is inadvertent.
EOUST is not attempting to waive a
trustee’s right to assert traditional
privileges. Paragraph (i) is revised to
include ‘‘non-privileged’’ before
‘‘information.’’
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5. Percentage Fees
Comment: One comment proposed
striking the language stating that this
rule does not authorize a trustee to seek
review of any decision to change the
trustee’s percentage fee, concluding that
the review of expenses without the
review of the percentage fee is
meaningless.
Response: The setting of the trustee’s
percentage fee and the allowance or
disallowance of expenses, though
related, are not inextricably tied
together. Though the amount of a
trustee’s expenses is one factor in
determining the trustee’s percentage fee,
it is not the only factor. A change in the
level of expenses may or may not
necessitate a change in a trustee’s
percentage fee. Further, 28 U.S.C.
586(e)(3) specifically requires the
Attorney General to develop procedures
for a standing trustee to obtain
administrative review of the United
States Trustee’s decision to deny the
trustee’s claim for actual, necessary
expenses. It is important to note that
this right to review is expressly limited
to the denial of a claim for expenses, not
the setting of the trustee’s percentage
fee. In order to maintain the scope of
review mandated by Congress, EOUST
declines to modify the rule as requested
by the comment.
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 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.
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 costs for
prosecuting an administrative appeal of
the United States Trustee’s denial of a
trustee’s claim of actual, necessary
expenses. The anticipated costs are the
compiling, photocopying and mailing of
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the requested records. However, none of
these costs are new. This rule simply
codifies the current practice for
obtaining administrative review of the
United States Trustee’s decision.
The benefits of this rule include the
codification of the process for a trustee
to obtain administrative review of the
United States Trustee’s denial of a
trustee’s claim of actual, necessary
expenses. These benefits justify its costs
in complying with Congress’ mandate to
prescribe procedures to implement 28
U.S.C. 586(e)(3).
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.
Paperwork Reduction Act
This rule does not contain an
information collection under the
Paperwork Reduction Act (44 U.S.C.
3501, et seq.). If a trustee wishes to
appeal the United States Trustee’s
decision, the trustee submits a request
for review to the Director detailing the
specific factual circumstances
supporting the trustee’s argument.
Regulatory Flexibility Act
In accordance with the Regulatory
Flexibility Act (5 U.S.C. 605(b)), the
Director has reviewed this rule and by
approving it certifies that it will not
have a significant economic impact on
a substantial number of small entities.
This certification is based upon the fact
that this rule does not impose any new
costs upon trustees that did not already
exist under the current administrative
review process. In addition, the costs of
compiling, photocopying and mailing
records are de minimis.
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
($100 million). Therefore, no actions
were deemed necessary under the
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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.
List of Subjects in 28 CFR Part 58
Administrative practice and
procedure, Bankruptcy, Credit and
debts.
Accordingly, for the reasons set forth
in the preamble, Part 58 of chapter I of
title 28 of the Code of Federal
Regulations is amended as follows:
PART 58—[AMENDED]
1. The authority citation for Part 58
continues 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 § 58.11 to read as follows:
§ 58.11 Procedures governing
administrative review of a United States
Trustee’s decision to deny a Chapter 12 or
Chapter 13 standing Trustee’s claim of
actual, necessary expenses.
(a) The following definitions apply to
this section. These terms shall have
these meanings:
(1) The term claim of actual,
necessary expenses means the request
by a chapter 12 or chapter 13 standing
trustee for the United States Trustee’s
approval of the trustee’s projected
expenses for each fiscal year budget, or
for an amendment to the current budget
when an increase in an individual
expense line item is greater than both
10% of the budgeted amount and
$5,000.00. Expenses for certain items
require prior United States Trustee
approval regardless of amount;
(2) The term director means the
person designated or acting as the
Director of the Executive Office for
United States Trustees;
(3) The term final decision means the
written determination issued by the
Director based upon the review of the
United States Trustee’s decision to deny
all or part of a trustee’s claim of actual,
necessary expenses;
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(4) The term notice means the written
communication from the United States
Trustee to a trustee that the trustee’s
claim of actual, necessary expenses has
been denied in whole or in part;
(5) The term request for review means
the written communication from a
trustee to the Director seeking review of
the United States Trustee’s decision to
deny, in whole or in part, the trustee’s
claim of actual, necessary expenses;
(6) The term trustee means an
individual appointed by the United
States Trustee under 28 U.S.C. 586(b) to
serve as the standing trustee for chapter
12 or chapter 13 cases in a particular
region; and
(7) The term United States Trustee
means, alternatively:
(i) A United States Trustee appointed
under 28 U.S.C. 581; or
(ii) A person acting as a United States
Trustee under 28 U.S.C. 585.
(b) The United States Trustee may
issue a decision to deny a trustee’s
claim of actual, necessary expenses.
Reasons for denial include, but are not
limited to, finding that the trustee failed
to do any of the following:
(1) Provide to the United States
Trustee sufficient justification for the
expense;
(2) Demonstrate to the United States
Trustee that the expense is a cost
effective use of funds;
(3) Demonstrate to the United States
Trustee that the expense is reasonably
related to the duties of the trustee;
(4) Obtain authorization from the
United States Trustee prior to making an
expenditure that was not provided for in
the current budget;
(5) Provide the United States Trustee
with documents, materials, or other
information pertaining to the expense;
(6) Timely submit to the United States
Trustee accurate budgets or requests for
amendment of budgets to cover the
additional expense; or
(7) Demonstrate to the United States
Trustee that the expense is directly
related to office operations.
(c) Before issuing a notice of denial,
the United States Trustee shall
communicate in writing with the trustee
in an attempt to resolve any dispute
over a claim of actual, necessary
expenses:
(1) For disputes involving the
trustee’s projected expenses for the
upcoming fiscal year budget, the United
States Trustee shall either resolve the
dispute or issue a notice of denial no
later than July 30 of the current calendar
year for a chapter 12 standing trustee or
October 31 of the current calendar year
for a chapter 13 standing trustee, or if
the United States Trustee has requested
additional information, 30 calendar
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14:21 May 27, 2011
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days from submission of the additional
information if such submission is after
July 1 for a chapter 12 standing trustee
or October 1 for a chapter 13 standing
trustee, unless the trustee and United
States Trustee agree to a longer period
of time. Any projected expenses not
specifically disputed shall be approved
in the ordinary course and the trustee’s
fee shall be set on an interim basis;
(2) For disputes over amendments to
the current year budget, the United
States Trustee shall either resolve the
dispute or issue a notice of denial no
later than 30 calendar days after the
trustee’s amendment request, or if the
United States Trustee has requested
additional information, 30 calendar
days from submission of the additional
information, unless the trustee and the
United States Trustee agree to a longer
period of time. Any portion of the
amendment not specifically disputed
shall be approved in the ordinary
course;
(3) If the United States Trustee does
not resolve the dispute or issue a notice
of denial within the time frames
identified in (c)(1) or (2) of this section,
the trustee’s claim of actual, necessary
expenses shall be deemed denied on the
next business day following expiration
of the time frames identified in (c)(1) or
(2) of this section.
(d) The United States Trustee shall
notify a trustee in writing of any
decision denying a trustee’s claim of
actual, necessary expenses. The notice
shall state the reason(s) for the decision
and shall reference any documents or
communications relied upon in
reaching the decision. The United States
Trustee shall provide to the trustee
copies of any such non-privileged
documents that were not supplied to the
United States Trustee by the trustee.
The notice shall be sent to the trustee by
overnight courier, for delivery the next
business day.
(e) The notice shall advise the trustee
that the decision is final and
unreviewable unless the trustee requests
in writing a review by the Director no
later than 21 calendar days from the
date of the notice to the trustee. If the
United States Trustee did not issue a
notice of denial, and the expenses were
deemed denied under (c)(3) of this
section, the trustee shall have 21
calendar days from the date on which
the expenses were deemed denied to
submit a request for review to the
Director.
(f) The decision to deny a trustee’s
claim of actual, necessary expenses
shall take effect upon the expiration of
a trustee’s time to seek review from the
Director or, if the trustee timely seeks
PO 00000
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Fmt 4700
Sfmt 4700
31229
such review, upon the issuance of a
final decision by the Director.
(g) The trustee’s request for review
shall be in writing and shall fully
describe why the trustee disagrees with
the United States Trustee’s decision,
and shall be accompanied by all
documents and materials the trustee
wants the Director to consider in
reviewing the United States Trustee’s
decision. The trustee shall send the
original and one copy of the request for
review, including all accompanying
documents and materials, to the Office
of the Director by overnight courier, for
delivery the next business day. In order
to be timely, a request for review shall
be received at the Office of the Director
no later than 21 calendar days from the
date of the notice to the trustee or the
date the expenses were deemed denied.
The trustee shall also send a copy of the
request for review to the United States
Trustee by overnight courier, for
delivery the next business day.
(h) The United States Trustee shall
have 21 calendar days from the date of
the trustee’s request for review to
submit to the Director a written
response regarding the matters raised in
the trustee’s request for review. The
United States Trustee shall provide a
copy of this response to the trustee by
overnight courier, for delivery the next
business day.
(i) The Director may seek additional
non-privileged information from any
party, in the manner and to the extent
the Director deems appropriate.
(j) In reviewing the decision to deny
a trustee’s claim of actual, necessary
expenses, the Director shall determine:
(1) Whether the decision is supported
by the record; and
(2) Whether the decision constitutes
an appropriate exercise of discretion.
(k) The Director shall issue a final
decision no later than 90 calendar days
from the receipt of the trustee’s request
for review, or, if the Director has
requested additional information, 30
calendar days from submission of the
additional information, unless the
trustee agrees to a longer period of time.
The Director’s final decision on the
trustee’s request for review shall
constitute final agency action.
(l) In reaching a final decision the
Director may specify a person to act as
a reviewing official. The reviewing
official may not be under the
supervision of the United States Trustee
who denied the trustee’s claim of actual,
necessary expenses. The reviewing
official’s duties shall be specified by the
Director on a case-by-case basis, and
may include reviewing the record,
obtaining additional information from
the participants, providing the Director
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31MYR1
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Federal Register / Vol. 76, No. 104 / Tuesday, May 31, 2011 / Rules and Regulations
with written recommendations, and
such other duties as the Director shall
prescribe in a particular case.
(m) This rule does not authorize a
trustee to seek review of any decision to
change maximum annual compensation,
to decrease or increase appointments of
trustees in a region or district, to change
the trustee’s percentage fee, or to
suspend, terminate, or remove a trustee.
(n) A trustee must exhaust all
administrative remedies before seeking
redress in any court of competent
jurisdiction.
Dated: May 12, 2011.
Clifford J. White III,
Director, Executive Office for United States
Trustees.
[FR Doc. 2011–12187 Filed 5–27–11; 8:45 am]
BILLING CODE 4410–40–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 161
[Docket No. USCG–1998–4399]
RIN 1625–AA58
Vessel Traffic Service Lower
Mississippi River; Correction
AGENCY:
Coast Guard, DHS.
ACTION:
Final rule; correction.
The United States Coast
Guard published a final rule in the
Federal Register on October 28, 2010
(75 FR 66309) establishing a mandatory
participation Vessel Traffic Service
(VTS) on the Lower Mississippi River
and transferring certain vessel traffic
management provisions of the
Mississippi River, Louisiana—Regulated
Navigation Area to the VTS. That
document inadvertently transposed the
coordinates for two of the reporting
points for the Algiers Point Special
Area.
SUMMARY:
DATES:
Effective on May 31, 2011.
If
you have questions on this correcting
amendment or the corresponding rule,
call or e-mail Lieutenant Commander
Jim Larson, Office of Shore Forces (CG–
7413), Coast Guard; telephone 202–372–
1554, e-mail James.W.Larson@uscg.mil.
If you have questions on viewing the
docket, call Renee V. Wright, Program
Manager, Docket Operations, telephone
202–366–9826.
SUPPLEMENTARY INFORMATION: This
amendment corrects a previously
printed error in the final rule that
mistakenly transposed geographic
coordinates for the Algiers Canal
Forebay and Huey P Long Bridge
reporting points in Table 161.65(f), VTS
FOR FURTHER INFORMATION CONTACT:
Lower Mississippi River Reporting
Points.
List of Subjects in 33 CFR Part 161
Harbors, Navigation (water),
Reporting and recordkeeping
requirements, Vessels, Waterways.
Accordingly, 33 CFR part 161 is
corrected by making the following
correcting amendment:
PART 161—VESSEL TRAFFIC
MANAGEMENT
1. The authority citation for part 161
continues to read as follows:
■
Authority: 33 U.S.C. 1223, 1231; 46 U.S.C.
70114, 70119; Pub. L. 107–295, 116 Stat.
2064; Department of Homeland Security
Delegation No. 0170.1.
2. In § 161.65, revise Table 161.65(f) to
read as follows:
■
§ 161.65 Vessel Traffic Service Lower
Mississippi River.
*
*
*
(f) * * *
*
*
TABLE 161.65(f)—VTS LOWER MISSISSIPPI RIVER REPORTING POINTS
Designator
Geographic name
Geographic
description
Latitude/longitude/mile
marker
Notes
A ..............
B ..............
C ..............
Algiers Canal Forebay .......
Industrial Canal ..................
Crescent Towing Smith
Fleet.
Marlex Terminal (Naval
Ships).
Huey P Long Bridge ..........
88.0 AHP .....
92.7 AHP .....
93.5 AHP .....
29°55.40′ N; 89°57.7′ W ....
29°57.2′ N; 90°01.68′ W ....
29°57.50′ N; 90°02.62′ W ..
99.0 AHP .....
29°54.65′ N; 90°05.87′ W ..
Upbound transiting Algiers Point Special Area.
Upbound transiting Algiers Point Special Area.
Upbound Towing vessels transiting Algiers Point Special Area.
Downbound transiting Algiers Point Special Area.
106.1 AHP ...
29°56.6′ N; 90°10.1′ W ......
Downbound transiting Algiers Point Special Area.
D ..............
E ..............
Dated: May 24, 2011.
Kathryn A. Sinniger,
Chief, Office of Regulations and
Administrative Law, United States Coast
Guard.
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
[FR Doc. 2011–13332 Filed 5–27–11; 8:45 am]
33 CFR Part 165
BILLING CODE 9110–04–P
[Docket No. USCG–2011–0375]
rmajette on DSK89S0YB1PROD with RULES
RIN 1625–AA00
Safety Zone; M.I.T.’s 150th Birthday
Celebration Fireworks, Charles River,
Boston, MA
The Coast Guard is
establishing a temporary safety zone
within the Sector Boston Captain of the
SUMMARY:
VerDate Mar<15>2010
14:21 May 27, 2011
Jkt 223001
PO 00000
Frm 00014
Fmt 4700
Sfmt 4700
This rule is effective and will be
enforced from 9 p.m. to 10 p.m. on June
4, 2011.
DATES:
Documents indicated in this
preamble as being available in the
docket are part of docket USCG–2011–
0375 and are available online by going
to https://www.regulations.gov, inserting
USCG–2011–0375 in the ‘‘Keyword’’
ADDRESSES:
Coast Guard, DHS.
Temporary final rule.
AGENCY:
ACTION:
Port (COTP) Zone for the M.I.T.’s 150th
Birthday Celebration Fireworks display.
This safety zone is necessary to provide
for the safety of life on navigable waters
during the fireworks event. Entering
into, transiting through, mooring or
anchoring within this zone is prohibited
unless authorized by the COTP or the
designated on-scene representative.
E:\FR\FM\31MYR1.SGM
31MYR1
]]>Agencies
[Federal Register Volume 76, Number 104 (Tuesday, May 31, 2011)]
[Rules and Regulations]
[Pages 31225-31230]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-12187]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
28 CFR Part 58
[Docket No.: EOUST 103]
RIN 1105-AB16
Procedures Governing Administrative Review of a United States
Trustee's Decision To Deny a Chapter 12 or Chapter 13 Standing
Trustee's Claim of Actual, Necessary Expenses
AGENCY: Executive Office for United States Trustees (``EOUST''),
Justice.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule (``rule'') sets forth the procedures for a
chapter 12 or chapter 13 standing trustee (``trustee'') to obtain
administrative review of a United States Trustee's decision to deny a
trustee's claim that certain expenses are actual and necessary for the
administration of bankruptcy cases. The Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005 (``BAPCPA'') requires that trustees
exhaust all administrative remedies pertaining to a denial of a claim
of actual, necessary expenses before seeking judicial review, and the
Attorney General prescribe procedures for administrative review of such
denials. This rule ensures that the process for administratively
reviewing a United States Trustee's denial of a trustee's request for
expenses is fair and effective.
DATES: Effective Date: This rule is effective June 30, 2011.
ADDRESSES: Executive Office for United States Trustees (``EOUST''), 20
Massachusetts Ave., NW., 8th Floor, Washington, DC 20530.
FOR FURTHER INFORMATION CONTACT: Ramona D. Elliott, General Counsel, or
Larry Wahlquist, Office of General Counsel, at (202) 307-1399 (not a
toll-free number).
SUPPLEMENTARY INFORMATION: On August 14, 2009, at 74 FR 41,101, EOUST
[[Page 31226]]
published a proposed rule on this topic. Before the comment period
closed on October 13, 2009, EOUST received two comments. The comments
received and EOUST's responses are discussed below.
Discussion
The administration of all chapter 12 and chapter 13 bankruptcy
cases is entrusted to private persons who are case or standing trustees
under the supervision and oversight of a regional United States
Trustee. As distinguished from case or standing trustees, United States
Trustees are employees of the Department of Justice. A standing trustee
is appointed by the United States Trustee under 28 U.S.C. 586 and
administers more than one chapter 12 or chapter 13 case, as opposed to
a case trustee who is appointed under 11 U.S.C. 1202 or 11 U.S.C. 1302
and who administers only the case to which the trustee is appointed.
This rule addresses the right, conferred by the BAPCPA, of a standing
trustee to obtain administrative review when the trustee's request for
projected expenses, referred to as a ``claim of actual, necessary
expenses'' in 28 U.S.C. 586(e)(3), is denied by the United States
Trustee.
When a debtor files for bankruptcy relief under chapter 12 or
chapter 13, the debtor proposes a plan to pay his or her creditors a
percentage of the amounts owed to creditors over a specified period of
time and obtains court approval of this plan. This process is termed
confirming a chapter 12 or chapter 13 plan. Once the bankruptcy court
confirms the plan, the trustee will oversee the payment of creditors
pursuant to the plan. The debtor pays plan payments to the trustee and
the trustee then disburses the appropriate amounts to creditors.
As part of the process of administering debtors' cases, a trustee
incurs expenses. A trustee is authorized to collect a specified
percentage from debtors' plan payments to pay for these expenses.
However, before incurring expenses, a trustee obtains approval from the
United States Trustee. As the first step in obtaining United States
Trustee approval for expenses, the United States Trustee requires that
the trustee submit a budget for the anticipated expenses for the fiscal
year. The fiscal year for the chapter 12 standing trustee ends each
June 30th; the fiscal year for the chapter 13 standing trustee ends
each September 30th. Next, these projected expenses are evaluated by
the United States Trustee who will either approve the expenses or
require modifications to the proposed budget. Once the United States
Trustee approves the trustee's budget, the trustee is notified of this
approval, and pursuant to 28 U.S.C. 586(e), the trustee's compensation
and a specified percentage fee that the trustee may collect from
debtors' plan payments are authorized. This fee is to be used for
payment of the approved expenses incurred during the fiscal year as
well as for the trustee's compensation.
When a trustee realizes that expenses for the current year might
exceed the approved amount, a trustee must submit a request to the
United States Trustee, and obtain approval, before incurring expenses
above the approved amount. This request must be submitted when the
increase to an individual expense line item is greater than both 10% of
the budgeted amount and $5,000.00. Expenses for certain items require
prior United States Trustee approval regardless of amount. These
expenses currently are increases in the amount budgeted for specified
employee expenses, increases in office lease obligations, payments to
the standing trustee or relative of the standing trustee, and expenses
for any item not originally contained in the approved budget. This
policy is set forth in the Handbook for Chapter 13 Standing Trustees
which is posted on the EOUST's Web site and will be incorporated in the
revised Handbook for Chapter 12 Standing Trustees. If any other
expenses are added to this list, the United States Trustee will notify
trustees via e-mail or regular mail at least 30 days before including
the new expenses in a revision to the Handbook.
If a trustee disagrees with the United States Trustee's denial of
the trustee's proposed budget or request for additional expenses, the
trustee may seek administrative review of the denial under the
procedures identified in this rule. The Director of EOUST
(``Director'') will conduct a de novo review of the United States
Trustee's decision to determine whether the record supports the United
States Trustee's decision and whether the decision was an appropriate
exercise of the United States Trustee's discretion or contrary to law.
With the passage of BAPCPA, Congress directed the Attorney General
to prescribe procedures implementing administrative review for trustees
when a claim of actual, necessary expenses is denied. The Attorney
General delegated this authority to the Director. In response to this
congressional mandate, the Director publishes this rule, which
establishes such procedures. This rule imposes requirements only upon
standing trustees who are supervised by United States Trustees. In
addition, this rule addresses only the United States Trustee's denial
of a trustee's claim of actual, necessary expenses. This rule does not
address the suspension or termination of trustees. EOUST will publish
another notice of proposed rulemaking that addresses the suspension or
termination of trustees with a RIN number of 1105-AB12.
Summary of Changes in Final Rule
The final rule differs from the proposed rule in the following
ways:
The administrative review process has been expedited by
shortening the time for a trustee to request review by the Director
from 30 calendar days to 21 calendar days after receiving a notice of
denial of expenses from the United States Trustee or after the expenses
were deemed denied. Similarly, the United States Trustee's time to
respond to the trustee's request for review has been shortened from 30
calendar days to 21 calendar days. These changes are reflected in
paragraphs (e) and (h).
Paragraphs (c)(1), (c)(2), and (k) have been revised to
eliminate the reference to ``the deadline'' so that the review process
cannot arbitrarily be delayed by setting long deadlines when the United
States Trustee or the Director seeks the submission of additional
information.
Paragraph (i) has been revised to include the word ``non-
privileged'' before ``information'' in order to make it consistent with
paragraph (d) and so that it is clear that the rule does not seek to
waive a trustee's right to assert traditional privileges.
The rule has been revised to reflect differences in
chapter 12 and chapter 13 fiscal years.
Discussion of Public Comments
EOUST received two comments on the proposed rule, one of which had
several sub-comments within it. 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.
1. Deadlines--Expediting the Administrative Review Process
Comment: One comment expressed concern that the time limits in the
rule allowed too much time to elapse before a final decision by the
Director must be issued. The comment suggested shortening the deadlines
for various stages during the administrative review process.
Specifically, the comment recommended the United States Trustee deny a
budget line item no later than October 10, the trustee appeal within 15
[[Page 31227]]
days, the United States Trustee respond within 10 days, and the
Director issue a decision within 90 days of the trustee's request for
review.
Response: EOUST recognizes that the administrative review process
can be lengthy at times and has revised the rule to shorten the process
as much as possible. However, sufficient time must be granted to the
trustee, United States Trustee, and the Director to perform their
respective duties to ensure a fair and just resolution is accomplished.
In order to balance the competing interests of a quick resolution with
that of obtaining the most equitable resolution that is fair to all
parties, EOUST has modified some of the deadlines in the rule. Although
the comment did not reference the time line for the chapter 12 trustee,
the same concern would exist. Specifically, the time for a trustee to
request review by the Director is shortened from 30 calendar days to 21
calendar days from the date of the United States Trustee's notice of
denial or 21 calendar days from the date on which the trustee's
expenses were deemed denied by the United States Trustee. Similarly,
the United States Trustee's deadline for responding to the trustee's
request for review has been shortened from 30 calendar days to 21
calendar days.
EOUST has not, however, modified the deadline for the United States
Trustee to issue a denial of a trustee's requested expenses--July 30
for chapter 12 standing trustee expenses and October 31 for chapter 13
standing trustee expenses. Though trustees are generally required to
submit a budget delineating the trustee's expenses by May 1 for chapter
12 trustees and July 1 for chapter 13 trustees, this is not always the
case in every region, and many trustees submit budgets after the due
date. In addition, it is not an infrequent occurrence for a chapter 12
trustee to submit a budget after June 1 or a chapter 13 trustee to
submit a budget after September 1. When this occurs, the United States
Trustee must have sufficient time to thoroughly review the trustee's
proposed expenses. Thus, in order to ensure the United States Trustee
has adequate time to review every trustee's expenses, including those
submitted late, EOUST declines to modify the rule to require the United
States Trustee to issue a denial by July 10 for chapter 12 trustees and
by October 10 for chapter 13 trustees.
2. Deadlines--Eliminating Delays for Submission of Additional
Information
Comment: One comment pointed out that the language in the rule
could significantly extend the time limits for reaching a resolution.
In paragraphs (c)(1), (c)(2), and (k), the rule states that if the
United States Trustee or the Director seeks additional information, the
time period for resolution or denial is extended to 30 days beyond
``the deadline for submission of the additional information.'' The
comment stated this could be read to allow the United States Trustee or
the Director to set a long deadline for the submission of additional
information, and thereby delay the review process.
Response: EOUST concurs that these paragraphs could be interpreted
as the comment indicated, though that was not the intent. Accordingly,
EOUST has modified paragraphs (c)(1), (c)(2), and (k) to eliminate the
reference to ``the deadline'' so that the review process continues upon
the submission of the additional information and cannot arbitrarily be
delayed by setting long deadlines for the submission of that additional
information.
3. Denying Expenses--Adding ``Good Cause'' Justification
Comment: One comment acknowledged that the rule does not require
the United States Trustee to deny a trustee's claim for expenses when a
trustee commits one of the reasons for denial as enunciated in
paragraphs (b)(1) through (7), and that the United States Trustee
possesses discretion to determine whether denial is appropriate.
However, the comment advocated that the rule should include a ``good
cause'' provision so that the United States Trustee may deny the
trustee's claim for expenses only if the trustee's failure is without
``good cause.''
Response: This change is unnecessary and could potentially transfer
the burden of proof from the trustee to the United States Trustee when
adjudicating a trustee's request for review. As the comment concedes,
the rule does not eliminate the United States Trustee's discretion to
approve or deny a trustee's claim for expenses.
The rule was intentionally drafted this way to provide the United
States Trustee with sufficient flexibility to approve expenses, in
appropriate circumstances, even when a trustee engages in one of the
enumerated reasons for denial. EOUST agrees that the rule must have
sufficient flexibility to account for special circumstances, such as
the inability to obtain prior approval of an expense due to a flood or
other natural disaster, which is precisely why the rule provides the
United States Trustee with discretion. In addition, the rule requires
the United States Trustee to communicate with the trustee in an attempt
to resolve any dispute before issuing a notice of denial. Thus, the
trustee will have ample opportunity to explain any reason or ``good
cause'' to the United States Trustee, necessitating the immediate
expenditures and which prevented the trustee from obtaining prior
approval of such expenses.
As the rule is currently written, the United States Trustee
possesses the discretion to deny a trustee's claim for expenses if the
trustee engages in one of the delineated reasons for denial (or some
similar reason). If an emergency situation caused the trustee to commit
one of these failures, then the trustee can explain the emergency to
the United States Trustee who may then decide that the claim for
expenses may be approved. Or, if the United States Trustee feels the
emergency did not warrant the trustee's failure, then the claim for
expenses may be denied.
If the United States Trustee denies the claim for expenses, then
the trustee may request the Director to review the United States
Trustee's decision, and may present the emergency situation to the
Director as a justifiable reason or ``good cause.''
The crucial point is that the trustee has the opportunity to
explain why an emergency situation caused the trustee's failure and the
United States Trustee has the flexibility under the rule to approve or
disapprove depending on what is most appropriate in the individual
circumstances. Because the rule provides sufficient flexibility for
emergency situations as written, there is no need to create a ``good
cause'' provision. Moreover, the addition of a ''good cause'' exception
may inappropriately require the United States Trustee to prove that the
``good cause'' was insufficient to justify the trustee's failure before
denying a claim for expenses, effectively transferring the burden of
proving whether a trustee's failure was justified from the trustee to
the United States Trustee. EOUST believes the trustee should bear the
burden of proof in demonstrating whether a sufficient reason exists for
excusing the trustee's failure. Accordingly, EOUST declines to modify
the rule as proposed by the comment.
4. Privileged Documents
Comment: One comment pointed out that paragraph (d) requires the
United States Trustee to provide ``non-privileged'' documents to the
Director while paragraph (i) allows the Director to seek ``additional
information from any party.'' The comment expressed concern that the
asymmetry between
[[Page 31228]]
these two paragraphs could mean that the rule intends to waive the
trustee's right to assert traditional privileges.
Response: The asymmetry between the two paragraphs is inadvertent.
EOUST is not attempting to waive a trustee's right to assert
traditional privileges. Paragraph (i) is revised to include ``non-
privileged'' before ``information.''
5. Percentage Fees
Comment: One comment proposed striking the language stating that
this rule does not authorize a trustee to seek review of any decision
to change the trustee's percentage fee, concluding that the review of
expenses without the review of the percentage fee is meaningless.
Response: The setting of the trustee's percentage fee and the
allowance or disallowance of expenses, though related, are not
inextricably tied together. Though the amount of a trustee's expenses
is one factor in determining the trustee's percentage fee, it is not
the only factor. A change in the level of expenses may or may not
necessitate a change in a trustee's percentage fee. Further, 28 U.S.C.
586(e)(3) specifically requires the Attorney General to develop
procedures for a standing trustee to obtain administrative review of
the United States Trustee's decision to deny the trustee's claim for
actual, necessary expenses. It is important to note that this right to
review is expressly limited to the denial of a claim for expenses, not
the setting of the trustee's percentage fee. In order to maintain the
scope of review mandated by Congress, EOUST declines to modify the rule
as requested by the comment.
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 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.
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 costs for
prosecuting an administrative appeal of the United States Trustee's
denial of a trustee's claim of actual, necessary expenses. The
anticipated costs are the compiling, photocopying and mailing of the
requested records. However, none of these costs are new. This rule
simply codifies the current practice for obtaining administrative
review of the United States Trustee's decision.
The benefits of this rule include the codification of the process
for a trustee to obtain administrative review of the United States
Trustee's denial of a trustee's claim of actual, necessary expenses.
These benefits justify its costs in complying with Congress' mandate to
prescribe procedures to implement 28 U.S.C. 586(e)(3).
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.
Paperwork Reduction Act
This rule does not contain an information collection under the
Paperwork Reduction Act (44 U.S.C. 3501, et seq.). If a trustee wishes
to appeal the United States Trustee's decision, the trustee submits a
request for review to the Director detailing the specific factual
circumstances supporting the trustee's argument.
Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act (5 U.S.C.
605(b)), the Director has reviewed this rule and by approving it
certifies that it will not have a significant economic impact on a
substantial number of small entities. This certification is based upon
the fact that this rule does not impose any new costs upon trustees
that did not already exist under the current administrative review
process. In addition, the costs of compiling, photocopying and mailing
records are de minimis.
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 ($100 million). 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.
List of Subjects in 28 CFR Part 58
Administrative practice and procedure, Bankruptcy, Credit and
debts.
Accordingly, for the reasons set forth in the preamble, Part 58 of
chapter I of title 28 of the Code of Federal Regulations is amended as
follows:
PART 58--[AMENDED]
0
1. The authority citation for Part 58 continues 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 Sec. 58.11 to read as follows:
Sec. 58.11 Procedures governing administrative review of a United
States Trustee's decision to deny a Chapter 12 or Chapter 13 standing
Trustee's claim of actual, necessary expenses.
(a) The following definitions apply to this section. These terms
shall have these meanings:
(1) The term claim of actual, necessary expenses means the request
by a chapter 12 or chapter 13 standing trustee for the United States
Trustee's approval of the trustee's projected expenses for each fiscal
year budget, or for an amendment to the current budget when an increase
in an individual expense line item is greater than both 10% of the
budgeted amount and $5,000.00. Expenses for certain items require prior
United States Trustee approval regardless of amount;
(2) The term director means the person designated or acting as the
Director of the Executive Office for United States Trustees;
(3) The term final decision means the written determination issued
by the Director based upon the review of the United States Trustee's
decision to deny all or part of a trustee's claim of actual, necessary
expenses;
[[Page 31229]]
(4) The term notice means the written communication from the United
States Trustee to a trustee that the trustee's claim of actual,
necessary expenses has been denied in whole or in part;
(5) The term request for review means the written communication
from a trustee to the Director seeking review of the United States
Trustee's decision to deny, in whole or in part, the trustee's claim of
actual, necessary expenses;
(6) The term trustee means an individual appointed by the United
States Trustee under 28 U.S.C. 586(b) to serve as the standing trustee
for chapter 12 or chapter 13 cases in a particular region; and
(7) The term United States Trustee means, alternatively:
(i) A United States Trustee appointed under 28 U.S.C. 581; or
(ii) A person acting as a United States Trustee under 28 U.S.C.
585.
(b) The United States Trustee may issue a decision to deny a
trustee's claim of actual, necessary expenses. Reasons for denial
include, but are not limited to, finding that the trustee failed to do
any of the following:
(1) Provide to the United States Trustee sufficient justification
for the expense;
(2) Demonstrate to the United States Trustee that the expense is a
cost effective use of funds;
(3) Demonstrate to the United States Trustee that the expense is
reasonably related to the duties of the trustee;
(4) Obtain authorization from the United States Trustee prior to
making an expenditure that was not provided for in the current budget;
(5) Provide the United States Trustee with documents, materials, or
other information pertaining to the expense;
(6) Timely submit to the United States Trustee accurate budgets or
requests for amendment of budgets to cover the additional expense; or
(7) Demonstrate to the United States Trustee that the expense is
directly related to office operations.
(c) Before issuing a notice of denial, the United States Trustee
shall communicate in writing with the trustee in an attempt to resolve
any dispute over a claim of actual, necessary expenses:
(1) For disputes involving the trustee's projected expenses for the
upcoming fiscal year budget, the United States Trustee shall either
resolve the dispute or issue a notice of denial no later than July 30
of the current calendar year for a chapter 12 standing trustee or
October 31 of the current calendar year for a chapter 13 standing
trustee, or if the United States Trustee has requested additional
information, 30 calendar days from submission of the additional
information if such submission is after July 1 for a chapter 12
standing trustee or October 1 for a chapter 13 standing trustee, unless
the trustee and United States Trustee agree to a longer period of time.
Any projected expenses not specifically disputed shall be approved in
the ordinary course and the trustee's fee shall be set on an interim
basis;
(2) For disputes over amendments to the current year budget, the
United States Trustee shall either resolve the dispute or issue a
notice of denial no later than 30 calendar days after the trustee's
amendment request, or if the United States Trustee has requested
additional information, 30 calendar days from submission of the
additional information, unless the trustee and the United States
Trustee agree to a longer period of time. Any portion of the amendment
not specifically disputed shall be approved in the ordinary course;
(3) If the United States Trustee does not resolve the dispute or
issue a notice of denial within the time frames identified in (c)(1) or
(2) of this section, the trustee's claim of actual, necessary expenses
shall be deemed denied on the next business day following expiration of
the time frames identified in (c)(1) or (2) of this section.
(d) The United States Trustee shall notify a trustee in writing of
any decision denying a trustee's claim of actual, necessary expenses.
The notice shall state the reason(s) for the decision and shall
reference any documents or communications relied upon in reaching the
decision. The United States Trustee shall provide to the trustee copies
of any such non-privileged documents that were not supplied to the
United States Trustee by the trustee. The notice shall be sent to the
trustee by overnight courier, for delivery the next business day.
(e) The notice shall advise the trustee that the decision is final
and unreviewable unless the trustee requests in writing a review by the
Director no later than 21 calendar days from the date of the notice to
the trustee. If the United States Trustee did not issue a notice of
denial, and the expenses were deemed denied under (c)(3) of this
section, the trustee shall have 21 calendar days from the date on which
the expenses were deemed denied to submit a request for review to the
Director.
(f) The decision to deny a trustee's claim of actual, necessary
expenses shall take effect upon the expiration of a trustee's time to
seek review from the Director or, if the trustee timely seeks such
review, upon the issuance of a final decision by the Director.
(g) The trustee's request for review shall be in writing and shall
fully describe why the trustee disagrees with the United States
Trustee's decision, and shall be accompanied by all documents and
materials the trustee wants the Director to consider in reviewing the
United States Trustee's decision. The trustee shall send the original
and one copy of the request for review, including all accompanying
documents and materials, to the Office of the Director by overnight
courier, for delivery the next business day. In order to be timely, a
request for review shall be received at the Office of the Director no
later than 21 calendar days from the date of the notice to the trustee
or the date the expenses were deemed denied. The trustee shall also
send a copy of the request for review to the United States Trustee by
overnight courier, for delivery the next business day.
(h) The United States Trustee shall have 21 calendar days from the
date of the trustee's request for review to submit to the Director a
written response regarding the matters raised in the trustee's request
for review. The United States Trustee shall provide a copy of this
response to the trustee by overnight courier, for delivery the next
business day.
(i) The Director may seek additional non-privileged information
from any party, in the manner and to the extent the Director deems
appropriate.
(j) In reviewing the decision to deny a trustee's claim of actual,
necessary expenses, the Director shall determine:
(1) Whether the decision is supported by the record; and
(2) Whether the decision constitutes an appropriate exercise of
discretion.
(k) The Director shall issue a final decision no later than 90
calendar days from the receipt of the trustee's request for review, or,
if the Director has requested additional information, 30 calendar days
from submission of the additional information, unless the trustee
agrees to a longer period of time. The Director's final decision on the
trustee's request for review shall constitute final agency action.
(l) In reaching a final decision the Director may specify a person
to act as a reviewing official. The reviewing official may not be under
the supervision of the United States Trustee who denied the trustee's
claim of actual, necessary expenses. The reviewing official's duties
shall be specified by the Director on a case-by-case basis, and may
include reviewing the record, obtaining additional information from the
participants, providing the Director
[[Page 31230]]
with written recommendations, and such other duties as the Director
shall prescribe in a particular case.
(m) This rule does not authorize a trustee to seek review of any
decision to change maximum annual compensation, to decrease or increase
appointments of trustees in a region or district, to change the
trustee's percentage fee, or to suspend, terminate, or remove a
trustee.
(n) A trustee must exhaust all administrative remedies before
seeking redress in any court of competent jurisdiction.
Dated: May 12, 2011.
Clifford J. White III,
Director, Executive Office for United States Trustees.
[FR Doc. 2011-12187 Filed 5-27-11; 8:45 am]
BILLING CODE 4410-40-P
