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payments made under the confirmed plan as the basis for calculating the UST's quarterly fee. The debtor further argued that chapter 11 (as amended by BAPCPA) requires individual debtors to spend more time paying the UST fee than corporate debtors because individual debtors no longer receive their discharges until they have made all, or substantially all, of their plan payments. See 11 U.S.C. S 1141(d)(5)(A). The debtor also argued that the UST does not deserve such a high fee because the UST's duties are limited once a plan in confirmed.
While the term "disbursements" is undefined by the Bankruptcy Code, the court declined to accord it a special definition without legislative direction to do so. Said the court, it is Congress who must qualify the term, not the court. The court found section 1930(a)(6) to be a simple, straight-forward calculation of the UST fee, which did not require the court to engage in a time-consuming and burdensome process. The bankruptcy court found no congressional intent to change the definition of "disbursements" for individual debtors, nor did the court find a statutory basis for altering the calculation upon confirmation of a plan. The court further found no legislative intent to link UST fees to its duties. Absent such a direction of Congress, the court adopted the broader definition and included in the calculation all payments made by the debtor after confirmation, including those made in the ordinary course of the debtor's business.
* In re The 1031 Tax Group, LLC, 374 B.R. 78 (Bankr. S.D.N.Y. Aug. 2007) (Glenn, J.)
The U.S. trustee's new duty to request the appointment of a chapter 11 trustee did not amend the standards for actually appointing one. In this case, the bankruptcy court discussed the effects of the 2005 amendments on the appointment of trustees in chapter 11 cases. Specifically, the court noted that, under section 1104(e), as amended, the U.S. Trustee now has a duty to request the appointment of a chapter 11 trustee if the circumstances could raise a reasonable suspicion of fraud by the debtor's management. The court agreed with the
U.S. Trustee that the circumstances surrounding the chapter 11 debtor's management structure could raise a reasonable suspicion of fraud. For that reason, the court declared the request for the appointment of a trustee to be prudent. Nevertheless, despite this new duty to request an appointment, the bankruptcy court held that the standards for appointing a trustee were left unchanged by BAPCPA. The court further maintained that a "reasonable ground to suspect" fraud did not equate to a prima facie case of "cause" to appoint a chapter 11 trustee. The debtor-in-possession in this case, according to the court, took adequate steps to free itself from the taint of the management's pre-petition fraud. Because cause was lacking and because the appointment of a trustee was not in creditors's best interests (the joint proposed plan would pay creditors in full) the court denied the U.S. Trustee's request.
* Edgar v. Avaya, Inc., 503 F.3d 340 (3d Cir. Sept. 2007) (Fuentes, J.)
Just how stringent are those ERISA disclosure duties? A simple caveat emptor will cover it. A pension plan participant instigated a class action law suit against her company when the company's stock price dropped by $2.68 the day after the company released its quarterly earnings statement. The employee asserted damages for, inter alia, breach of the duty to
