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[Federal Register Volume 76, Number 104 (Tuesday, May 31, 2011)]
[Rules and Regulations]
[Pages 31225-31230]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-12187]

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DEPARTMENT OF JUSTICE

28 CFR Part 58

[Docket No.: EOUST 103]
RIN 1105-AB16

Procedures Governing Administrative Review of a United States 
Trustee's Decision To Deny a Chapter 12 or Chapter 13 Standing 
Trustee's Claim of Actual, Necessary Expenses

AGENCY: Executive Office for United States Trustees (``EOUST''), 
Justice.

ACTION: Final rule.

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SUMMARY: This final rule (``rule'') sets forth the procedures for a 
chapter 12 or chapter 13 standing trustee (``trustee'') to obtain 
administrative review of a United States Trustee's decision to deny a 
trustee's claim that certain expenses are actual and necessary for the 
administration of bankruptcy cases. The Bankruptcy Abuse Prevention and 
Consumer Protection Act of 2005 (``BAPCPA'') requires that trustees 
exhaust all administrative remedies pertaining to a denial of a claim 
of actual, necessary expenses before seeking judicial review, and the 
Attorney General prescribe procedures for administrative review of such 
denials. This rule ensures that the process for administratively 
reviewing a United States Trustee's denial of a trustee's request for 
expenses is fair and effective.

DATES: Effective Date: This rule is effective June 30, 2011.

ADDRESSES: Executive Office for United States Trustees (``EOUST''), 20 
Massachusetts Ave., NW., 8th Floor, Washington, DC 20530.

FOR FURTHER INFORMATION CONTACT: Ramona D. Elliott, General Counsel, or 
Larry Wahlquist, Office of General Counsel, at (202) 307-1399 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION: On August 14, 2009, at 74 FR 41,101, EOUST

[[Page 31226]]

published a proposed rule on this topic. Before the comment period 
closed on October 13, 2009, EOUST received two comments. The comments 
received and EOUST's responses are discussed below.

Discussion

    The administration of all chapter 12 and chapter 13 bankruptcy 
cases is entrusted to private persons who are case or standing trustees 
under the supervision and oversight of a regional United States 
Trustee. As distinguished from case or standing trustees, United States 
Trustees are employees of the Department of Justice. A standing trustee 
is appointed by the United States Trustee under 28 U.S.C. 586 and 
administers more than one chapter 12 or chapter 13 case, as opposed to 
a case trustee who is appointed under 11 U.S.C. 1202 or 11 U.S.C. 1302 
and who administers only the case to which the trustee is appointed. 
This rule addresses the right, conferred by the BAPCPA, of a standing 
trustee to obtain administrative review when the trustee's request for 
projected expenses, referred to as a ``claim of actual, necessary 
expenses'' in 28 U.S.C. 586(e)(3), is denied by the United States 
Trustee.
    When a debtor files for bankruptcy relief under chapter 12 or 
chapter 13, the debtor proposes a plan to pay his or her creditors a 
percentage of the amounts owed to creditors over a specified period of 
time and obtains court approval of this plan. This process is termed 
confirming a chapter 12 or chapter 13 plan. Once the bankruptcy court 
confirms the plan, the trustee will oversee the payment of creditors 
pursuant to the plan. The debtor pays plan payments to the trustee and 
the trustee then disburses the appropriate amounts to creditors.
    As part of the process of administering debtors' cases, a trustee 
incurs expenses. A trustee is authorized to collect a specified 
percentage from debtors' plan payments to pay for these expenses. 
However, before incurring expenses, a trustee obtains approval from the 
United States Trustee. As the first step in obtaining United States 
Trustee approval for expenses, the United States Trustee requires that 
the trustee submit a budget for the anticipated expenses for the fiscal 
year. The fiscal year for the chapter 12 standing trustee ends each 
June 30th; the fiscal year for the chapter 13 standing trustee ends 
each September 30th. Next, these projected expenses are evaluated by 
the United States Trustee who will either approve the expenses or 
require modifications to the proposed budget. Once the United States 
Trustee approves the trustee's budget, the trustee is notified of this 
approval, and pursuant to 28 U.S.C. 586(e), the trustee's compensation 
and a specified percentage fee that the trustee may collect from 
debtors' plan payments are authorized. This fee is to be used for 
payment of the approved expenses incurred during the fiscal year as 
well as for the trustee's compensation.
    When a trustee realizes that expenses for the current year might 
exceed the approved amount, a trustee must submit a request to the 
United States Trustee, and obtain approval, before incurring expenses 
above the approved amount. This request must be submitted when the 
increase to an individual expense line item is greater than both 10% of 
the budgeted amount and $5,000.00. Expenses for certain items require 
prior United States Trustee approval regardless of amount. These 
expenses currently are increases in the amount budgeted for specified 
employee expenses, increases in office lease obligations, payments to 
the standing trustee or relative of the standing trustee, and expenses 
for any item not originally contained in the approved budget. This 
policy is set forth in the Handbook for Chapter 13 Standing Trustees 
which is posted on the EOUST's Web site and will be incorporated in the 
revised Handbook for Chapter 12 Standing Trustees. If any other 
expenses are added to this list, the United States Trustee will notify 
trustees via e-mail or regular mail at least 30 days before including 
the new expenses in a revision to the Handbook.
    If a trustee disagrees with the United States Trustee's denial of 
the trustee's proposed budget or request for additional expenses, the 
trustee may seek administrative review of the denial under the 
procedures identified in this rule. The Director of EOUST 
(``Director'') will conduct a de novo review of the United States 
Trustee's decision to determine whether the record supports the United 
States Trustee's decision and whether the decision was an appropriate 
exercise of the United States Trustee's discretion or contrary to law.
    With the passage of BAPCPA, Congress directed the Attorney General 
to prescribe procedures implementing administrative review for trustees 
when a claim of actual, necessary expenses is denied. The Attorney 
General delegated this authority to the Director. In response to this 
congressional mandate, the Director publishes this rule, which 
establishes such procedures. This rule imposes requirements only upon 
standing trustees who are supervised by United States Trustees. In 
addition, this rule addresses only the United States Trustee's denial 
of a trustee's claim of actual, necessary expenses. This rule does not 
address the suspension or termination of trustees. EOUST will publish 
another notice of proposed rulemaking that addresses the suspension or 
termination of trustees with a RIN number of 1105-AB12.

Summary of Changes in Final Rule

    The final rule differs from the proposed rule in the following 
ways:
     The administrative review process has been expedited by 
shortening the time for a trustee to request review by the Director 
from 30 calendar days to 21 calendar days after receiving a notice of 
denial of expenses from the United States Trustee or after the expenses 
were deemed denied. Similarly, the United States Trustee's time to 
respond to the trustee's request for review has been shortened from 30 
calendar days to 21 calendar days. These changes are reflected in 
paragraphs (e) and (h).
     Paragraphs (c)(1), (c)(2), and (k) have been revised to 
eliminate the reference to ``the deadline'' so that the review process 
cannot arbitrarily be delayed by setting long deadlines when the United 
States Trustee or the Director seeks the submission of additional 
information.
     Paragraph (i) has been revised to include the word ``non-
privileged'' before ``information'' in order to make it consistent with 
paragraph (d) and so that it is clear that the rule does not seek to 
waive a trustee's right to assert traditional privileges.
     The rule has been revised to reflect differences in 
chapter 12 and chapter 13 fiscal years.

Discussion of Public Comments

    EOUST received two comments on the proposed rule, one of which had 
several sub-comments within it. EOUST has considered each comment 
carefully and appreciates the time and effort required to prepare and 
submit each comment. EOUST's responses to the comments are discussed 
below.

1. Deadlines--Expediting the Administrative Review Process

    Comment: One comment expressed concern that the time limits in the 
rule allowed too much time to elapse before a final decision by the 
Director must be issued. The comment suggested shortening the deadlines 
for various stages during the administrative review process. 
Specifically, the comment recommended the United States Trustee deny a 
budget line item no later than October 10, the trustee appeal within 15

[[Page 31227]]

days, the United States Trustee respond within 10 days, and the 
Director issue a decision within 90 days of the trustee's request for 
review.
    Response: EOUST recognizes that the administrative review process 
can be lengthy at times and has revised the rule to shorten the process 
as much as possible. However, sufficient time must be granted to the 
trustee, United States Trustee, and the Director to perform their 
respective duties to ensure a fair and just resolution is accomplished. 
In order to balance the competing interests of a quick resolution with 
that of obtaining the most equitable resolution that is fair to all 
parties, EOUST has modified some of the deadlines in the rule. Although 
the comment did not reference the time line for the chapter 12 trustee, 
the same concern would exist. Specifically, the time for a trustee to 
request review by the Director is shortened from 30 calendar days to 21 
calendar days from the date of the United States Trustee's notice of 
denial or 21 calendar days from the date on which the trustee's 
expenses were deemed denied by the United States Trustee. Similarly, 
the United States Trustee's deadline for responding to the trustee's 
request for review has been shortened from 30 calendar days to 21 
calendar days.
    EOUST has not, however, modified the deadline for the United States 
Trustee to issue a denial of a trustee's requested expenses--July 30 
for chapter 12 standing trustee expenses and October 31 for chapter 13 
standing trustee expenses. Though trustees are generally required to 
submit a budget delineating the trustee's expenses by May 1 for chapter 
12 trustees and July 1 for chapter 13 trustees, this is not always the 
case in every region, and many trustees submit budgets after the due 
date. In addition, it is not an infrequent occurrence for a chapter 12 
trustee to submit a budget after June 1 or a chapter 13 trustee to 
submit a budget after September 1. When this occurs, the United States 
Trustee must have sufficient time to thoroughly review the trustee's 
proposed expenses. Thus, in order to ensure the United States Trustee 
has adequate time to review every trustee's expenses, including those 
submitted late, EOUST declines to modify the rule to require the United 
States Trustee to issue a denial by July 10 for chapter 12 trustees and 
by October 10 for chapter 13 trustees.

2. Deadlines--Eliminating Delays for Submission of Additional 
Information

    Comment: One comment pointed out that the language in the rule 
could significantly extend the time limits for reaching a resolution. 
In paragraphs (c)(1), (c)(2), and (k), the rule states that if the 
United States Trustee or the Director seeks additional information, the 
time period for resolution or denial is extended to 30 days beyond 
``the deadline for submission of the additional information.'' The 
comment stated this could be read to allow the United States Trustee or 
the Director to set a long deadline for the submission of additional 
information, and thereby delay the review process.
    Response: EOUST concurs that these paragraphs could be interpreted 
as the comment indicated, though that was not the intent. Accordingly, 
EOUST has modified paragraphs (c)(1), (c)(2), and (k) to eliminate the 
reference to ``the deadline'' so that the review process continues upon 
the submission of the additional information and cannot arbitrarily be 
delayed by setting long deadlines for the submission of that additional 
information.

3. Denying Expenses--Adding ``Good Cause'' Justification

    Comment: One comment acknowledged that the rule does not require 
the United States Trustee to deny a trustee's claim for expenses when a 
trustee commits one of the reasons for denial as enunciated in 
paragraphs (b)(1) through (7), and that the United States Trustee 
possesses discretion to determine whether denial is appropriate. 
However, the comment advocated that the rule should include a ``good 
cause'' provision so that the United States Trustee may deny the 
trustee's claim for expenses only if the trustee's failure is without 
``good cause.''
    Response: This change is unnecessary and could potentially transfer 
the burden of proof from the trustee to the United States Trustee when 
adjudicating a trustee's request for review. As the comment concedes, 
the rule does not eliminate the United States Trustee's discretion to 
approve or deny a trustee's claim for expenses.
    The rule was intentionally drafted this way to provide the United 
States Trustee with sufficient flexibility to approve expenses, in 
appropriate circumstances, even when a trustee engages in one of the 
enumerated reasons for denial. EOUST agrees that the rule must have 
sufficient flexibility to account for special circumstances, such as 
the inability to obtain prior approval of an expense due to a flood or 
other natural disaster, which is precisely why the rule provides the 
United States Trustee with discretion. In addition, the rule requires 
the United States Trustee to communicate with the trustee in an attempt 
to resolve any dispute before issuing a notice of denial. Thus, the 
trustee will have ample opportunity to explain any reason or ``good 
cause'' to the United States Trustee, necessitating the immediate 
expenditures and which prevented the trustee from obtaining prior 
approval of such expenses.
    As the rule is currently written, the United States Trustee 
possesses the discretion to deny a trustee's claim for expenses if the 
trustee engages in one of the delineated reasons for denial (or some 
similar reason). If an emergency situation caused the trustee to commit 
one of these failures, then the trustee can explain the emergency to 
the United States Trustee who may then decide that the claim for 
expenses may be approved. Or, if the United States Trustee feels the 
emergency did not warrant the trustee's failure, then the claim for 
expenses may be denied.
    If the United States Trustee denies the claim for expenses, then 
the trustee may request the Director to review the United States 
Trustee's decision, and may present the emergency situation to the 
Director as a justifiable reason or ``good cause.''
    The crucial point is that the trustee has the opportunity to 
explain why an emergency situation caused the trustee's failure and the 
United States Trustee has the flexibility under the rule to approve or 
disapprove depending on what is most appropriate in the individual 
circumstances. Because the rule provides sufficient flexibility for 
emergency situations as written, there is no need to create a ``good 
cause'' provision. Moreover, the addition of a ''good cause'' exception 
may inappropriately require the United States Trustee to prove that the 
``good cause'' was insufficient to justify the trustee's failure before 
denying a claim for expenses, effectively transferring the burden of 
proving whether a trustee's failure was justified from the trustee to 
the United States Trustee. EOUST believes the trustee should bear the 
burden of proof in demonstrating whether a sufficient reason exists for 
excusing the trustee's failure. Accordingly, EOUST declines to modify 
the rule as proposed by the comment.

4. Privileged Documents

    Comment: One comment pointed out that paragraph (d) requires the 
United States Trustee to provide ``non-privileged'' documents to the 
Director while paragraph (i) allows the Director to seek ``additional 
information from any party.'' The comment expressed concern that the 
asymmetry between

[[Page 31228]]

these two paragraphs could mean that the rule intends to waive the 
trustee's right to assert traditional privileges.
    Response: The asymmetry between the two paragraphs is inadvertent. 
EOUST is not attempting to waive a trustee's right to assert 
traditional privileges. Paragraph (i) is revised to include ``non-
privileged'' before ``information.''

5. Percentage Fees

    Comment: One comment proposed striking the language stating that 
this rule does not authorize a trustee to seek review of any decision 
to change the trustee's percentage fee, concluding that the review of 
expenses without the review of the percentage fee is meaningless.
    Response: The setting of the trustee's percentage fee and the 
allowance or disallowance of expenses, though related, are not 
inextricably tied together. Though the amount of a trustee's expenses 
is one factor in determining the trustee's percentage fee, it is not 
the only factor. A change in the level of expenses may or may not 
necessitate a change in a trustee's percentage fee. Further, 28 U.S.C. 
586(e)(3) specifically requires the Attorney General to develop 
procedures for a standing trustee to obtain administrative review of 
the United States Trustee's decision to deny the trustee's claim for 
actual, necessary expenses. It is important to note that this right to 
review is expressly limited to the denial of a claim for expenses, not 
the setting of the trustee's percentage fee. In order to maintain the 
scope of review mandated by Congress, EOUST declines to modify the rule 
as requested by the comment.

Executive Order 12866

    This rule has been drafted and reviewed in accordance with 
Executive Order 12866, ``Regulatory Planning and Review'' section 1(b), 
The Principles of Regulation. This rule is not a ``significant 
regulatory action'' as defined by Executive Order 12866 and, 
accordingly, this rule has not been reviewed by the Office of 
Management and Budget.
    The Department has also assessed both the costs and benefits of 
this rule as required by section 1(b)(6) and has made a reasoned 
determination that the benefits of this regulation justify its costs. 
The costs considered in this regulation include the costs for 
prosecuting an administrative appeal of the United States Trustee's 
denial of a trustee's claim of actual, necessary expenses. The 
anticipated costs are the compiling, photocopying and mailing of the 
requested records. However, none of these costs are new. This rule 
simply codifies the current practice for obtaining administrative 
review of the United States Trustee's decision.
    The benefits of this rule include the codification of the process 
for a trustee to obtain administrative review of the United States 
Trustee's denial of a trustee's claim of actual, necessary expenses. 
These benefits justify its costs in complying with Congress' mandate to 
prescribe procedures to implement 28 U.S.C. 586(e)(3).

Executive Order 13132

    This rule will not have a substantial direct effect on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. Therefore, in accordance with Executive Order 
13132, it is determined that this rule does not have sufficient 
federalism implications to warrant the preparation of a Federalism 
Assessment.

Paperwork Reduction Act

    This rule does not contain an information collection under the 
Paperwork Reduction Act (44 U.S.C. 3501, et seq.). If a trustee wishes 
to appeal the United States Trustee's decision, the trustee submits a 
request for review to the Director detailing the specific factual 
circumstances supporting the trustee's argument.

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 
605(b)), the Director has reviewed this rule and by approving it 
certifies that it will not have a significant economic impact on a 
substantial number of small entities. This certification is based upon 
the fact that this rule does not impose any new costs upon trustees 
that did not already exist under the current administrative review 
process. In addition, the costs of compiling, photocopying and mailing 
records are de minimis.

Unfunded Mandates Reform Act of 1995

    This rule does not require the preparation of an assessment 
statement in accordance with the Unfunded Mandates Reform Act of 1995, 
2 U.S.C. 1531. This rule does not include a Federal mandate that may 
result in the annual expenditure by State, local, and Tribal 
governments, in the aggregate, or by the private sector, of more than 
the annual threshold established by the Act ($100 million). Therefore, 
no actions were deemed necessary under the provisions of the Unfunded 
Mandates Reform Act of 1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 
801 et seq. This rule will not result in an annual effect on the 
economy of $100 million or more; a major increase in costs or prices; 
or significant adverse effects on competition, employment, investment, 
productivity, and innovation; or on the ability of United States-based 
companies to compete with foreign-based companies in domestic and 
export markets.

List of Subjects in 28 CFR Part 58

    Administrative practice and procedure, Bankruptcy, Credit and 
debts.

    Accordingly, for the reasons set forth in the preamble, Part 58 of 
chapter I of title 28 of the Code of Federal Regulations is amended as 
follows:

PART 58--[AMENDED]

0
1. The authority citation for Part 58 continues to read as follows:

    Authority: 5 U.S.C. 301, 552; 11 U.S.C. 109(h), 111, 521(b), 
727(a)(11), 1141(d)(3), 1202; 1302, 1328(g); 28 U.S.C. 509, 510, 
586, 589b.

0
2. Add Sec.  58.11 to read as follows:

Sec.  58.11  Procedures governing administrative review of a United 
States Trustee's decision to deny a Chapter 12 or Chapter 13 standing 
Trustee's claim of actual, necessary expenses.

    (a) The following definitions apply to this section. These terms 
shall have these meanings:
    (1) The term claim of actual, necessary expenses means the request 
by a chapter 12 or chapter 13 standing trustee for the United States 
Trustee's approval of the trustee's projected expenses for each fiscal 
year budget, or for an amendment to the current budget when an increase 
in an individual expense line item is greater than both 10% of the 
budgeted amount and $5,000.00. Expenses for certain items require prior 
United States Trustee approval regardless of amount;
    (2) The term director means the person designated or acting as the 
Director of the Executive Office for United States Trustees;
    (3) The term final decision means the written determination issued 
by the Director based upon the review of the United States Trustee's 
decision to deny all or part of a trustee's claim of actual, necessary 
expenses;

[[Page 31229]]

    (4) The term notice means the written communication from the United 
States Trustee to a trustee that the trustee's claim of actual, 
necessary expenses has been denied in whole or in part;
    (5) The term request for review means the written communication 
from a trustee to the Director seeking review of the United States 
Trustee's decision to deny, in whole or in part, the trustee's claim of 
actual, necessary expenses;
    (6) The term trustee means an individual appointed by the United 
States Trustee under 28 U.S.C. 586(b) to serve as the standing trustee 
for chapter 12 or chapter 13 cases in a particular region; and
    (7) The term United States Trustee means, alternatively:
    (i) A United States Trustee appointed under 28 U.S.C. 581; or
    (ii) A person acting as a United States Trustee under 28 U.S.C. 
585.
    (b) The United States Trustee may issue a decision to deny a 
trustee's claim of actual, necessary expenses. Reasons for denial 
include, but are not limited to, finding that the trustee failed to do 
any of the following:
    (1) Provide to the United States Trustee sufficient justification 
for the expense;
    (2) Demonstrate to the United States Trustee that the expense is a 
cost effective use of funds;
    (3) Demonstrate to the United States Trustee that the expense is 
reasonably related to the duties of the trustee;
    (4) Obtain authorization from the United States Trustee prior to 
making an expenditure that was not provided for in the current budget;
    (5) Provide the United States Trustee with documents, materials, or 
other information pertaining to the expense;
    (6) Timely submit to the United States Trustee accurate budgets or 
requests for amendment of budgets to cover the additional expense; or
    (7) Demonstrate to the United States Trustee that the expense is 
directly related to office operations.
    (c) Before issuing a notice of denial, the United States Trustee 
shall communicate in writing with the trustee in an attempt to resolve 
any dispute over a claim of actual, necessary expenses:
    (1) For disputes involving the trustee's projected expenses for the 
upcoming fiscal year budget, the United States Trustee shall either 
resolve the dispute or issue a notice of denial no later than July 30 
of the current calendar year for a chapter 12 standing trustee or 
October 31 of the current calendar year for a chapter 13 standing 
trustee, or if the United States Trustee has requested additional 
information, 30 calendar days from submission of the additional 
information if such submission is after July 1 for a chapter 12 
standing trustee or October 1 for a chapter 13 standing trustee, unless 
the trustee and United States Trustee agree to a longer period of time. 
Any projected expenses not specifically disputed shall be approved in 
the ordinary course and the trustee's fee shall be set on an interim 
basis;
    (2) For disputes over amendments to the current year budget, the 
United States Trustee shall either resolve the dispute or issue a 
notice of denial no later than 30 calendar days after the trustee's 
amendment request, or if the United States Trustee has requested 
additional information, 30 calendar days from submission of the 
additional information, unless the trustee and the United States 
Trustee agree to a longer period of time. Any portion of the amendment 
not specifically disputed shall be approved in the ordinary course;
    (3) If the United States Trustee does not resolve the dispute or 
issue a notice of denial within the time frames identified in (c)(1) or 
(2) of this section, the trustee's claim of actual, necessary expenses 
shall be deemed denied on the next business day following expiration of 
the time frames identified in (c)(1) or (2) of this section.
    (d) The United States Trustee shall notify a trustee in writing of 
any decision denying a trustee's claim of actual, necessary expenses. 
The notice shall state the reason(s) for the decision and shall 
reference any documents or communications relied upon in reaching the 
decision. The United States Trustee shall provide to the trustee copies 
of any such non-privileged documents that were not supplied to the 
United States Trustee by the trustee. The notice shall be sent to the 
trustee by overnight courier, for delivery the next business day.
    (e) The notice shall advise the trustee that the decision is final 
and unreviewable unless the trustee requests in writing a review by the 
Director no later than 21 calendar days from the date of the notice to 
the trustee. If the United States Trustee did not issue a notice of 
denial, and the expenses were deemed denied under (c)(3) of this 
section, the trustee shall have 21 calendar days from the date on which 
the expenses were deemed denied to submit a request for review to the 
Director.
    (f) The decision to deny a trustee's claim of actual, necessary 
expenses shall take effect upon the expiration of a trustee's time to 
seek review from the Director or, if the trustee timely seeks such 
review, upon the issuance of a final decision by the Director.
    (g) The trustee's request for review shall be in writing and shall 
fully describe why the trustee disagrees with the United States 
Trustee's decision, and shall be accompanied by all documents and 
materials the trustee wants the Director to consider in reviewing the 
United States Trustee's decision. The trustee shall send the original 
and one copy of the request for review, including all accompanying 
documents and materials, to the Office of the Director by overnight 
courier, for delivery the next business day. In order to be timely, a 
request for review shall be received at the Office of the Director no 
later than 21 calendar days from the date of the notice to the trustee 
or the date the expenses were deemed denied. The trustee shall also 
send a copy of the request for review to the United States Trustee by 
overnight courier, for delivery the next business day.
    (h) The United States Trustee shall have 21 calendar days from the 
date of the trustee's request for review to submit to the Director a 
written response regarding the matters raised in the trustee's request 
for review. The United States Trustee shall provide a copy of this 
response to the trustee by overnight courier, for delivery the next 
business day.
    (i) The Director may seek additional non-privileged information 
from any party, in the manner and to the extent the Director deems 
appropriate.
    (j) In reviewing the decision to deny a trustee's claim of actual, 
necessary expenses, the Director shall determine:
    (1) Whether the decision is supported by the record; and
    (2) Whether the decision constitutes an appropriate exercise of 
discretion.
    (k) The Director shall issue a final decision no later than 90 
calendar days from the receipt of the trustee's request for review, or, 
if the Director has requested additional information, 30 calendar days 
from submission of the additional information, unless the trustee 
agrees to a longer period of time. The Director's final decision on the 
trustee's request for review shall constitute final agency action.
    (l) In reaching a final decision the Director may specify a person 
to act as a reviewing official. The reviewing official may not be under 
the supervision of the United States Trustee who denied the trustee's 
claim of actual, necessary expenses. The reviewing official's duties 
shall be specified by the Director on a case-by-case basis, and may 
include reviewing the record, obtaining additional information from the 
participants, providing the Director

[[Page 31230]]

with written recommendations, and such other duties as the Director 
shall prescribe in a particular case.
    (m) This rule does not authorize a trustee to seek review of any 
decision to change maximum annual compensation, to decrease or increase 
appointments of trustees in a region or district, to change the 
trustee's percentage fee, or to suspend, terminate, or remove a 
trustee.
    (n) A trustee must exhaust all administrative remedies before 
seeking redress in any court of competent jurisdiction.

    Dated: May 12, 2011.
Clifford J. White III,
Director, Executive Office for United States Trustees.
[FR Doc. 2011-12187 Filed 5-27-11; 8:45 am]
BILLING CODE 4410-40-P
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