From: Nigel.Allen@bbs.oit.unc.edu (Nigel Allen)
Subject: Bankruptcy: Justice Department Announces U.S. Trustee Program Initiative
Organization: NDA
Distribution: usa
Date: Wed, 30 Sep 1992 00:38:36 GMT


Here is a press release from the U.S. Department of Justice

 Justice Department Announces U.S. Trustee Program Initiative
 To: National and Business desks
 Contact: U.S. Department of Justice, 202-514-2007

   WASHINGTON, Sept. 28 -- The Department of Justice announced 
today the results of the first six months of United States
Trustee Program initiative to close thousands of bankruptcy cases
that have remained open since 1979 and to increase the efficiency and
effectiveness by which all cases are administered.
   The U.S. Trustee Program was created to bring greater supervision
to the administration of bankruptcy estates and was placed within the
department's jurisdiction.  Previously, the judiciary supervised
private trustees and debtors.  The program, which inherited a large
caseload, was established on a nationwide basis in 1986 and by 1989
assumed responsibility over the supervision of bankruptcy estates
filed after 1979.
   As of July 15, 1992, 47 percent of chapter 7 bankruptcy cases
filed before 1989 were closed with 17,600 remaining open.  As of
Jan. 15, 1992, there were approximately 33,100 chapter 7 bankruptcy
cases pending that were filed prior to 1989.  All of the cases were
commenced subsequent to the effective date of the Bankruptcy Reform
Act of 1978.
   Chapter 7 of the Bankruptcy Code provides that upon a debtor
filing a bankruptcy petition, a private trustee is appointed to
liquidate the debtor's assets and distribute the proceeds to the
debtor's creditors.
   Private trustees have pledged to close overwhelming numbers of the
remaining old cases unless there is justification for them to remain
open.  Failure to abide by these commitments will lead to the
imposition of sanctions against trustees ranging from suspending the
trustee from receiving future cases to seeking a court order to
remove the trustee.
   The U.S. Trustee program has devoted significant efforts to bring
te administration of chapter 7 estates more in line with traditional
fiduciary standards.  These efforts have included imposing periodic
reporting requirements on the part of private trustees and greater
scrutiny over their conduct, including audits of their operations and
review of the fees and costs charged to the estates.
   Since the beginning of the year, the Trustees' program has pursued
two goals: first, that cases are concluded expeditiously; and second,
that cases are administered consistent with the interest of the
beneficiaries of the estates, the creditors.
   Since the program expanded, and as a result of enhanced
supervision:
   -- Thirty-three trustees or employees of trustees have been
prosecuted for embezzling estate funds.  Since January 1992, four
private trustees and three employees of private trustees have pled
guilty to embezzling estate funds.
   -- Enforcement motions were filed against 29 trustees for slow or
ineffective administration of cases.
   -- Eight trustees were permanently suspended from receiving future
cases.
   John Logan, director of the Executive Office for U.S. Trustees,
said, "A fundamental element of the fair administration of justice is
the adherence to fiduciary standards of those entrusted with
bankruptcy estate monies.  The results of the United States Trustee
Program's actions demonstrate that the department will not tolerate
those who transgress the standards of the law and seek to fulfill
their own self-interests.
 -30-

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