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Trustee & 341 Meeting Of Creditors
LAWDOG is intended to assist in the understanding of basic concepts. See Disclaimer. Always obtain legal advice from legal professionals.
Duties Of Trustee
341 Meeting Of Creditors
The debtor in a Chapter 12 proceeding generally continues to operate the family farm. A debtor in possession in a Chapter 12 proceeding generally has the rights and powers, and must perform most of the functions and duties, of a trustee serving in a case under Chapter 11, including operating the debtor's farm. See Section 1203 reproduced here for illustration purposes only.
On request of a party in interest, and after notice and a hearing, the court may order the removal of the debtor as debtor in possession for cause, including fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the debtor, either before or after the commencement of the case. After notice and a hearing, the court may also reinstate the debtor in possession. See Section 1204 reproduced here for illustration purposes only.
When a Chapter 12 petition is filed, Section 1202 requires that a Trustee be appointed to administer the case. The United States Trustee may appoint a "standing" Trustee, as in Chapter 13 cases. The duties of a Chapter 12 Trustee may be very similar to those of a trustee in Chapter 13. However, if the court has removed the debtor as debtor in possession, or the debtor otherwise ceases to be a debtor in possession, the Chapter 12 trustee must perform the duties of a Chapter 11 trustee, and operate the farm of the debtor. See Section 1202 reproduced here for illustration purposes only.
The Section 341 Meeting of Creditors, formerly and commonly referred to as "First Meeting of Creditors" is intended to provide an opportunity early in the case for creditors, a Trustee, and the United States Trustee to ask questions of the debtor.
At the Section 341 Meeting of Creditors, or "341 Meeting," presided over by the United States Trustee's Office (not by a judge), the debtor must appear and answer, under oath, questions posed by creditors, a Trustee or the U.S. Trustee's office. Bankruptcy Rules Rule 2003(a) provides that "In a chapter 12 family farmer debt adjustment case, the United States trustee shall call a meeting of creditors to be held no fewer than 20 and no more than 35 days after the order of relief." The debtor must attend the meeting, at which creditors may appear and ask questions regarding the debtor's financial affairs and any proposed plan. See Section 341 reproduced here and Section 343 reproduced here for illustration purposes only.
