Department of Justice Executive Office for United States Trustees - Final Agency Action - Case No. 00-0006

Sep 16, 2026

Final Agency Action for Case No. 00-0006 addresses a request for review under 28 C.F.R. § 58.6 concerning a decision by the United States Trustee to terminate a panel trustee’s receipt of new case assignments and to decline reappointment after the term ended on December 31, 2000. The review weighs whether the decision was a proper exercise of discretion and whether it was supported by the record. The case discusses a Field Examination initiated in June 2000, resulting findings on internal controls and record-keeping, and the trustee’s procedural objections and responses.

LanguageEnglish

CategoryLetters

FormatPDF

Pages14

Reading Time5 min

AccessFree to download

Course of this Proceeding

Standard of Review

Analysis

I. The Duties of the United States Trustee and Case Trustee

II. The Stated Reasons Support Termination of the Trustee

Department of Justice Executive Office for United States Trustees Final Agency Action Case No. 00-0006 Review of the Decision of the United States Trustee for [redacted] Regarding [redacted] [Redacted](“trustee”), a member of the chapter 7 panel for the United States Bankruptcy Court for the [redacted] since January 10 , 1994, seeks review under 28 C. F.R. § 58.6 of a decision by the United States Trustee to terminate her receipt of new case assignments and notreappoint her to the panel of trustees upon the expiration of her term on December 31, 2000. I affirm the United States Trustee’s decision based upon the record before me.1 Course of this Proceeding The United States Trustee commenced a regularly scheduled Field Examination ofthe trustee during the week of June 26, 2000, selecting sixteen cases administered by the trustee to review in detail. AField Examination is conducted by personnel of the United States Trustee Program and is designed to identify whether a trustee’s asset administration system and internal controls are adequate to safeguard bankruptcy estate funds. See 1998 Handbook for Chapter 7 Trustees at 9-16. On October 24, 2000, a Report of the Field Examination (“Field Examination Report”) was issued which concluded that the quality of the trustee’s internal controls, financial record keeping, reporting procedures, and asset administration procedures was [sic] inadequate for safeguarding of bankruptcy estate funds in accordance with the [1998] Handbook [for Chapter 7 Trustees] . 1The record includes the United States Trustee’s Notice of Decision to Terminate the Assignment of Cases and Notice of Decision not to Renew Term Appointment dated October 26, 2000 (“Notice”), which contained the Field Examination Report; the trustee’s Request for Review dated November 14, 2000 (“Request for Review”); the United States Trustee’s Response dated November 27, 2000,(“UST Response”); all exhibits thereto attached or incorporated by reference; and data maintained by the Office of Review and Oversight, Executive Office for United States Trustees. Field Examination Report 3. Based upon these conclusions, and the trustee’s failure to adequately monitor the work of professionals employed by her, the United States Trustee notified the trustee of his decision to terminate new case assignment s and not reappoint her upon the expiration of her term. The trustee timely filed her Request for Review with the Director of the Executive Office for United States Trustees. Standard of Review In conducting this review, the Director must consider two factors: (1) Did the United States Trustee’s decision constitute an appropriate exercise of discretion; and, (2) Was the United States Trustee’s decision supported by the record. See 28 C.F.R. § 58.6(i) (specifying the scope of the Director’s review) . Analysis I. THE DUTIES OF THE UNITED STATES TRUSTEE AND CASE TRUSTEE United States Trustees supervise panel trustees, 28 U.S.C. § 586(a)(1), and appoint them to individual chapter 7 cases. 11 U.S.C. § 701. They carefully “monitor the performance of panel members . . . in order to determine whether they should be continued in or removed from panel membership.” H.R. Rep. No. 95-595, 95th Cong., 1st Sess. 102 (1977) . Under the law,“[t]he United States trustee is permitted to conduct his own investigation . . . to exercise effective supervision and make an effective evaluation of the performance of the private trustees on the panel.” [Id.](Id. at)[ at](Id. at) 110. Trustees are fiduciaries with wide-ranging responsibilities to effectuate the goals of the particular chapter under which a bankruptcy case is filed. Because they are fiduciaries, trustees are held to very high standards of honesty and loyalty. See generally Woods v. City National Bank & Trust Co., 312 U. S. 262 , 278 (1941); Mosser v. Darrow, 341 U.S. 267 (1951) . See also Meinhard v. Salmon, 249 N.Y. 458, 464, 164 N.E. 545, 546 (1928) (Cardozo, C.J.) .

FAQs

What action is challenged in Case No. 00-0006?

The challenge concerns the United States Trustee’s decision to terminate a panel trustee’s receipt of new case assignments and not reappoint her upon the expiration of her term.

What is the purpose of the Field Examination referenced in the document?

The Field Examination is designed to assess whether the trustee’s asset administration system and internal controls are adequate to safeguard bankruptcy estate funds.

What standard does the Director apply in reviewing the United States Trustee’s decision?

The Director considers whether the decision was an appropriate exercise of discretion and whether it was supported by the record, as specified in 28 C.F.R. § 58.6(i).

What procedural concern does the trustee raise regarding the Field Examination Report?

The trustee argues the Report was issued almost four months after the exit conference and that she received only 13 days to respond, asserting this was an abuse of discretion under the Handbook requirements.

Sep 16, 2026

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