Opinion
No. 79-01222-BKC-TCB
February 12, 1980
Bankruptcy Reform Act — Trustee — Eligibility — Creditors' Attorney — A creditor or a creditor's attorney may be nominated to serve as trustee in a bankruptcy proceeding as long as the requirements of Section 321 of the Bankruptcy Code and Bankruptcy Rule 310(d) are met.
See Sec. 321(a) at ¶ 8201, Sec. 321(b) at ¶ 8602 and Rule 310(d) at ¶ 20,110.
Bankruptcy Reform Act — Trustee — Election — Replacement of Interim Trustee — Calculation of Votes
In determining whether a trustee has been elected to replace an interim trustee by a vote meeting the requirements of Section 702(c) of the Bankruptcy Code, only those claims on file at the time of the creditors' meeting may be calculated. See Sec. 702(c) at ¶ 10,006, Rule 207(a) at ¶ 20,057, and Interim Rule 2003 at ¶ 22,113.
[Digest of Opinion]
At the creditors' meeting in this Chapter 7 case, an individual nominated and sought to elect himself as trustee on behalf of ten unsecured creditors who had filed claims with a total value of $141,529. A total of $286,619 worth of undisputed, unsecured claims had been filed in this case at the time of the creditors' meeting.
The court first noted that there is no prohibition in the Bankruptcy Code, the Bankruptcy Rules or the Interim Rules to the nomination of a creditor or of a creditor's attorney to serve as trustee so long as that individual is competent pursuant to Section 321(a)(1) of the Code, has not served as an examiner in the case under Section 321(b), does not have a potential conflict of interest under Bankruptcy Rule 210(d) and either lives or has an office in the district or in the adjacent district pursuant to Section 321(a)(2). The court found that the individual met these requirements.
Further, under Section 702(c), a trustee may be elected to replace an interim trustee, as in the instant case, only by a vote representing at least 20 percent in amount of the undisputed, unsecured claims filed at or before the creditors' meeting and by a majority in amount of those creditors voting. The court determined that "although the Code does not limit the calculation of the vote to those claims on file at the time of the creditors' meeting, it is obvious that this assumption is necessarily implied." The provisions of Interim Rule 2003(b)(3) have resolved any doubt in this area.
Accordingly
In this case, the individual spoke for well in excess of the 20 percent minimum number required. Therefore, the court denied the objections to the election of the trustee.