[Federal Register Volume 73, Number 195 (Tuesday, October 7, 2008)]
[Rules and Regulations]
[Pages 58438-58445]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-23700]


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DEPARTMENT OF JUSTICE

28 CFR Part 58

[Docket No: EOUST 101]
RIN 1105-AB29


Procedures for Completing Uniform Forms of Trustee Final Reports 
in Cases Filed Under Chapters 7, 12, and 13 of the Bankruptcy Code

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

ACTION: Final rule.

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SUMMARY: The Department of Justice, through its component, EOUST, is 
issuing this final rule (rule) pursuant to Section 602 of the 
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 
(BAPCPA).\1\ The BAPCPA requires the Department to issue rules 
requiring uniform forms for final reports (Uniform Forms) by trustees 
in cases under chapters 7, 12, and 13 of title 11. The BAPCPA requires 
the rule to strike the best achievable practical balance between (1) 
the reasonable needs of the public for information about the 
operational results of the Federal bankruptcy system, (2) economy, 
simplicity, and lack of undue burden on persons with a duty to file 
these reports, and (3) appropriate privacy concerns and safeguards.
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    \1\ Codified at 28 U.S.C. 589b.

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DATES: Effective Date: This rule is effective April 1, 2009.

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

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

SUPPLEMENTARY INFORMATION: On February 4, 2008 at 73 FR 6447, the 
Department published a proposed rule

[[Page 58439]]

on this topic. Before the comment period closed on April 4, 2008, 
EOUST, within the Department, received comments from 71 commenters. The 
comments received and EOUST's responses are discussed below. This final 
rule finalizes the proposed rule with changes that reduce the burden on 
trustees.

Discussion

    The administration of all chapter 7, 12, and 13 bankruptcy cases is 
entrusted to private persons who are trustees under the supervision and 
oversight of a regional United States Trustee.\2\ As distinguished from 
trustees, United States Trustees are employees of the Department of 
Justice.
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    \2\ The United States Trustee Program does not operate in 
Alabama and North Carolina. Therefore, United States Trustees do not 
supervise trustees in these two states.
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    In every case, a trustee must file with the court and submit to the 
United States Trustee a final report and final account of his or her 
case administration. The United States Trustee reviews these reports 
and they are then filed with the court.
    While the trustee final report forms currently used across the 
country essentially serve the same purpose and convey the same 
information, the format of the forms and required attachments, and even 
the names of the forms, can be different. In fact, there are over a 
hundred different versions of these forms in use throughout the 
country. With the passage of BAPCPA, Congress directed the Attorney 
General to draft rules creating nationally uniform forms for trustee 
final reports. The Attorney General delegated this authority to the 
Director, Executive Office for United States Trustees. In response to 
this congressional mandate, the Director publishes this rule, which 
requires trustees to utilize nationally uniform final report forms 
rather than the local forms currently in effect. This rule does not 
impose requirements on the general public; it imposes requirements only 
upon trustees who are supervised by United States Trustees. UST Forms 
101-7-TFR, 101-7-NFR, 101-7-TDR, 101-7-NDR, 101-12-FR-S, 101-13-FR-S, 
101-12-FR-C, and 101-13-FR-C \3\ are the final report Uniform Forms 
required by this rule. The information required by these forms is set 
forth in section 58.7 in the amendatory text below. These Uniform Forms 
will facilitate the review of a trustee's case administration, which 
will assist in maintaining the public's trust in the bankruptcy system. 
In addition, these reports, once filed in a case, will be available to 
the general public at the office of the clerk of the United States 
Bankruptcy Court where a case is pending during the hours established 
by the bankruptcy court clerk. Members of the public should contact 
individual United States Bankruptcy Courts to obtain information about 
the policies and procedures for inspection of final reports filed in 
any particular case. Final reports in cases are also available through 
the Internet by accessing the Electronic Case Filing System under PACER 
at www.pacer.psc.uscourts.gov.
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    \3\ TFR (Trustee's Final Report); NFR (Notice of Trustee's Final 
Report); TDR (Trustee's Final Account and Distribution Report); NDR 
(Trustee's Report of No Distribution) FR-S (Standing Trustee's Final 
Report and Account) FR-C (Case Trustee's Final Report and Account).
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    These Uniform Forms shall be filed via the United States Bankruptcy 
Courts Case Management/Electronic Case Filing System (CM/ECF) as a 
``smart form'' that has been approved by EOUST unless the court offers 
an automated process, such as the virtual event through CM/ECF 
described below. A smart form is a document that is data enabled. When 
it is saved into the industry standard Portable Document Format (PDF), 
stored data tags are then available for extraction and searching. This 
is contrary to a form that is not data-enabled, where the PDF is simply 
an image of the form and data is not uniformly available for searching. 
The data-enabled form builds upon the existing Adobe PDF/A standard 
(Version 1.4). Specifically, the standard incorporates the use of XMP 
metadata or Acroform field and value (F/V) tags within an Adobe PDF 
document. The current data schema (DTD) is found on www.usdoj.gov/ust. 
Trustees may obtain these ``smart form'' Uniform Forms from their 
vendor of trustee case management software. Members of the public may 
obtain blank Uniform Forms from each United States Trustee field office 
or from EOUST's Web site at www.usdoj.gov/ust.
    Regarding UST Form 101-7-NDR (used for ``no asset'' cases), the 
Administrative Office of the United States Courts (AOUSC) is enhancing 
the courts' CM/ECF system to allow for the filing of this form as a 
virtual docket event. After a local court adopts this enhancement, 
trustees will be able to complete the UST Form 101-7-NDR as a virtual 
entry form electronically via the court's CM/ECF system in lieu of 
filing an attached PDF. In addition, the CM/ECF system is being 
designed to collect pertinent NDR data elements and automatically 
include them with the virtual NDR event, to the extent the data is 
collected. This will significantly streamline the process for trustees 
since they will not have to enter additional data in most cases. Based 
upon representations by AOUSC, this enhancement will be included in CM/
ECF version 3.3, which is scheduled to be released to the bankruptcy 
courts in September of 2008. Given the above release date, and based on 
past practice, it is reasonable to anticipate that bankruptcy courts 
will implement version 3.3 by or before March 2009. Therefore, EOUST 
makes this rule effective April 1, 2009. However, some cases filed 
within 60 days prior to the rule's effective date may not be filed 
under the courts' new CM/ECF version 3.3, which will collect the 
pertinent data elements for the virtual NDR. To prevent confusion and 
undue burden, trustees are not required to manually enter the 
information for the NDR for cases filed within 60 days prior to this 
rule's effective date.
    The usage of these Uniform Forms will accomplish Congress' mandate 
to develop nationally uniform forms for trustee final reports as 
directed in the BAPCPA. The Uniform Forms will also assist policy-
makers, scholars, and the public to better understand the bankruptcy 
system. Instead of many different versions of trustee final reports, 
trustees throughout the country will use the same eight forms. This 
will greatly assist consumers in being able to understand the 
administration of bankruptcy cases, especially when a consumer is 
located in a different region from where the bankruptcy case is 
located. Additionally, the information from the Uniform Forms may be 
nationally aggregated, which will assist Congress in compiling data to 
accurately analyze bankruptcy trends when making policy decisions. 
Scholars and members of the public may also be able to obtain aggregate 
data with the necessary software.

Summary of Changes in Final Rule

    The final rule differs from the proposed rule in the following 
ways: First, UST Form 101-7-NDR has been modified from an Adobe PDF 
document to make it a virtual entry form that trustees can complete 
electronically in the court's docket. Additionally, via the court's CM/
ECF virtual event, multiple NDR forms can be filed with the court 
simultaneously in batch mode format. These changes will significantly 
reduce the burden on trustees in completing the NDR. Second, the 
penalty of perjury language has been deleted from the NDR. Third, when 
trustees file the NDR in cases that have been converted and funds 
collected, the certification has been altered to read, ``all funds have 
been returned or transferred to the successor trustee.'' Fourth, the 
trustee

[[Page 58440]]

certification in UST Form 101-7-TFR that all tax returns have been 
filed has been deleted.

Discussion of Public Comments

    EOUST received 71 comments on the proposed rule, many of which had 
several sub-comments within them. 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 and are organized according to the structure provided in the 
Uniform Forms.

A. General Comments

1. General Questions About Completing the Uniform Forms
    Comment: Several comments had specific questions about how to 
complete the Uniform Forms, such as whether the phrase in the Uniform 
Forms ``assets abandoned'' refers to the specific assets or their 
monetary value, and whether the phrase ``claims discharged without 
payment'' refers to the balance amount of claims unpaid or claims for 
which no payment was made.
    Response: The phrase ``assets abandoned'' refers to the monetary 
amount of the assets abandoned. The phrase ``claims discharged without 
payment'' refers to both the balance amount of unpaid claims and 
allowed claims for which no payment was made. Answers to questions such 
as these about how to complete the Uniform Forms and the meaning of 
terms or phrases are contained in the instructions that accompany the 
forms. The instructions are available on EOUST's Web site at 
www.usdoj.gov/ust.
2. Trustee Compensation
    Comment: Several comments stated that trustees are only paid $60 
for no-asset cases and that this compensation for no-asset cases has 
not increased in several years, and that it is unfair to require 
trustees to do extra work without additional compensation. Three of the 
comments stated it is especially unfair when debtors file in forma 
pauperis.
    Response: EOUST recognizes that BAPCPA requires additional work by 
trustees without corresponding compensation and that compensation for 
no-asset cases has not increased for several years. However, the 
authority to increase trustees' compensation is vested with Congress.
3. Entities Affected by the Rule
    Comment: One comment stated the rule affects courts and others in 
addition to trustees.
    Response: This comment is correct; the rule does affect more 
entities that just trustees. However, the rule imposes requirements 
only upon trustees and not upon the general public or upon the courts.
4. Costs to the Government
    Comment: One comment questioned whether the costs identified in the 
section entitled Executive Order 12866 included costs to the judiciary.
    Response: The costs to the government identified in the rule 
reflect only those costs to EOUST.
5. Number of Cases
    Comment: One comment stated that some trustees close more than 500 
cases per year.
    Response: The 500 cases per year figure was an average number of 
cases. EOUST recognizes that some trustees close more than 500 cases 
per year and that some trustees close fewer than 500 cases per year.
6. Data-enabled Court Forms for Pro Se Debtors
    Comment: One comment stated that courts should ensure pro se 
debtors use data enabled court forms and provide the means necessary 
for them to do so.
    Response: Only the Judicial Conference of the United States is 
authorized to mandate requirements regarding the format of bankruptcy 
court documents and whether to require pro se debtors to use data 
enabled court forms.

B. UST Form 101-7-NDR

7. Discussion of Public Comments
    EOUST received 71 comments on the proposed rule, many of which had 
several sub-comments within them. EOUST has considered each comment 
carefully and appreciates the time Substantial Increase in Burden.
    Comment: Many comments stated that the NDR form will substantially 
increase trustees' costs and workload, and is an undue burden upon 
trustees.
    Response: EOUST recognizes that the NDR will impose a significant 
burden upon trustees and has worked with AOUSC to reduce this burden. 
Accordingly, EOUST and AOUSC have developed a virtual entry NDR form 
that will greatly reduce the burden upon trustees.
8. Automated NDR
    Comment: Many comments stated that EOUST should not implement the 
rule until the NDR can be generated by a more automated process.
    Response: EOUST has worked closely with AOUSC to modify the current 
virtual text entry NDR to incorporate the new data required by BAPCPA. 
The new virtual entry NDR will be automatically populated in most 
cases.
9. Balancing of Public Need vs. Burden Upon Trustees
    Comment: Many comments stated that the NDR did not sufficiently 
balance the needs of the public for information with the burden upon 
trustees as required by the BAPCPA.
    Response: With the development of the virtual entry NDR form, the 
burden upon trustees is greatly reduced. In most cases, the NDR form 
will be populated by an automated process and trustees may also file 
multiple NDR forms in batch file method. Accordingly, the needs of the 
public for information and the burden upon trustees appear now to be 
appropriately balanced.
10. Economic Impact
    Comment: Many comments stated that the economic impact of the NDR 
is understated and will actually cost trustees more money than EOUST 
anticipated.
    Response: This issue is now moot with the development of the 
virtual entry NDR.
11. Penalty of Perjury
    Comment: Many comments stated that EOUST does not have the 
authority to require the NDR to be filed under penalty of perjury.
    Response: EOUST has removed the requirement to file the NDR under 
penalty of perjury because the NDR will be a virtual-text entry.
12. Relying Upon Debtors' Schedules
    Comment: Many comments stated that the NDR does not provide 
guidance on whether trustees may rely solely upon debtors' schedules 
when completing the NDR.
    Response: Trustees may rely upon debtors' schedules. In the 
Instructions that EOUST will post on its Web site, EOUST explains that 
trustees may rely solely upon the schedules submitted by debtors.
13. Time To Complete NDR
    Comment: Many comments stated that the estimated 10 minutes to 
complete the NDR is understated and that it will actually take longer.
    Response: This issue is now moot with the development of the 
virtual entry NDR.
14. Value of Information
    Comment: Several comments stated that there is little value in the 
information gathered from the NDR and

[[Page 58441]]

that the statistics will be invalid or duplicative.
    Response: The NDR will enable Congress, academics, and the general 
public to better understand the bankruptcy process and what happens in 
a no-asset bankruptcy case. For instance, the amounts of abandoned 
assets and claims scheduled to be discharged without payment will be 
available on a national basis.
15. Government Clerk Capturing Data From NDR
    Comment: Several comments stated that a government clerk could 
capture the information from the NDR rather than trustees.
    Response: This issue is now moot with the development of the 
virtual entry NDR. However, it should be noted that Congress mandated 
trustees, not government clerks, to file final reports.
16. Out of Business
    Comment: Several comments stated that increased costs associated 
with the NDR may drive trustees out of business.
    Response: This issue is now moot with the development of the 
virtual entry NDR.
17. Staff To Input Information
    Comment: A few comments stated that not all trustees have staff to 
input information for the NDR and that it will, therefore, be more 
costly for them.
    Response: This issue is now moot with the development of the 
virtual entry NDR.
18. Review of Impact of NDR
    Comment: Three comments stated that the NDR should not be 
implemented until its impact upon trustees has been further studied.
    Response: Since the virtual entry NDR will now be implemented, 
there is no need to delay its implementation to study the effect of the 
Adobe PDF NDR.
19. Batch Filing
    Comment: Three comments stated that the NDR should not be 
implemented until a batch filing method is approved.
    Response: Trustees may utilize batch filing with the virtual entry 
NDR.
20. Data Enabled Forms
    Comment: Three comments stated that implementation of the NDR 
should be delayed until bankruptcy practitioners were mandated to use 
data enabled bankruptcy court forms.
    Response: Only the Judicial Conference of the United States is 
authorized to mandate requirements regarding the format of bankruptcy 
court documents. However, AOUSC has worked with EOUST to develop a 
virtual entry NDR, which will greatly reduce the burden on trustees in 
completing the NDR.
21. Number of Bankruptcy Cases
    Comment: Two comments stated that EOUST should not rely upon the 
decreasing number of bankruptcy cases as a basis for imposing the NDR 
since bankruptcy cases will probably increase.
    Response: EOUST did not rely upon the number of bankruptcy cases 
filed as a basis for creating the NDR. Congress mandated creation of 
uniform forms for trustee final reports in the BAPCPA, now codified at 
28 U.S.C. 589b. It is this statutory mandate from Congress that EOUST 
relied upon in developing the NDR.
22. Simplify NDR
    Comment: Two comments stated that EOUST may simplify the NDR and 
still discharge its statutory duties.
    Response: EOUST has simplified the NDR by working with AOUSC to 
develop the virtual entry NDR.
23. Timing of Filing NDR
    Comment: One comment stated that EOUST should require the new NDR 
be filed only in cases where the current virtual text entry NDR is not 
filed 90 days from the date the petition was filed or 45 days after 
conclusion of the creditors' meeting.
    Response: This issue is now moot with the development of the 
virtual entry NDR.
24. Uniformity
    Comment: One comment questioned how the NDR can be uniform when 
debtors in some states may use state exemptions, which can vary.
    Response: Congress mandated the usage of uniform trustee final 
reports. Varying state exemptions will not alter the uniformity of the 
NDR form.
25. Virtual Entry NDR
    Comment: One comment stated that EOUST should issue a rule 
authorizing the current practice of filing virtual entry NDR forms for 
no-asset cases.
    Response: EOUST has developed, in conjunction with AOUSC, a virtual 
entry NDR for no-asset cases.
26. Rewording of NDR
    Comment: One comment questioned whether it is appropriate to 
require trustees to certify on the NDR that ``all funds have been 
returned'' in cases which are converted and funds have been collected.
    Response: EOUST has modified the trustee certification for cases 
that were converted to read in part, ``all funds have been returned or 
transferred to the successor trustee.''
27. Courts' Requirements
    Comment: One comment stated that the NDR may not meet with courts' 
requirements.
    Response: EOUST has worked with AOUSC in developing the virtual 
entry NDR to respond to courts' concerns. Therefore, it should meet 
courts' requirements.
28. Pilot Program
    Comment: One comment stated a pilot program should be utilized 
before making the NDR mandatory in all districts.
    Response: The virtual entry NDR eliminates the need for a pilot 
program.
29. Funding
    Comment: One comment stated that Congress should provide funding to 
enable EOUST to collect the information in the NDR rather than 
requiring trustees to do so.
    Response: This issue is now moot with the development of the 
virtual entry NDR.
30. Data Transmission
    Comment: One comment questioned whether EOUST has considered 
whether the information from the NDR could be transmitted directly from 
the courts to EOUST.
    Response: The BAPCPA requires trustees to file final reports in 
every bankruptcy case; EOUST and AOUSC have worked together to simplify 
the transmission of information.
31. Require Uniform Forms in No-asset Cases Only
    Comment: One comment stated that the proposed NDR report fails to 
balance economy with the burden on the trustee. The comment pointed out 
that the current practice was simply to file a ``report of no 
distribution,'' containing no data, in place of a ``formal final 
report,'' and asks that this practice be continued.
    Response: The comment correctly identifies the current practice. 
However, the Bankruptcy Code requires a ``final report'' in all chapter 
7 cases. Section 589b now sets forth the specific data required in a 
chapter 7 final report and does not distinguish between ``asset'' and 
``no asset'' cases. EOUST cannot balance economy and burden by simply 
ignoring the statutory requirement to provide specific data in all 
chapter 7 final reports.

[[Page 58442]]

C. UST Form 101-7-TFR

32. Certification of Tax Returns
    Comment: Many comments stated that the requirement that a 
certification that all tax returns have been filed is impractical and 
unnecessary.
    Response: EOUST concurs and has removed this certification from the 
TFR.
33. Simplify TFR
    Comment: One comment stated that the TFR form should be simplified.
    Response: The TFR has already been simplified as much as it can be 
and still maintain the necessary information for one to understand the 
trustee's administration of the case and proposed distribution of 
assets.
34. Exhibit C
    Comment: One comment stated that Exhibit C was not provided as an 
example of what information is required.
    Response: The required information is clearly identified in the 
rule. Exhibit C was designed to allow trustees the greatest flexibility 
possible to file their own version of claims analysis.
35. Rewording of TFR
    Comment: One comment suggested that in section 58.7, replacing the 
phrase ``before the case may be closed'' with the phrase ``in 
preparation for closing an asset case.'' This comment also suggested 
replacing ``bar date'' with ``deadline'' in paragraph 6 of the TFR, 
along with other various stylistic changes.
    Response: EOUST has adopted some of the comment's suggestions and 
modified the rule and the TFR accordingly. Specifically, section 
58.7(a) has been revised to read, ``[a] chapter 7 trustee must complete 
UST Form 101-7-TFR final report (TFR) in preparation for closing an 
asset case * * *.'' Paragraph six of the TFR now reads, ``[t]he 
deadline for filing claims in this case * * *.''

D. UST Form 101-7-NFR

36. Rewording NFR
    Comment: One comment suggested amending section 58.7(b) by 
substituting ``the amounts specified in Fed. R. Bankr. P. 2002(f)(8)'' 
for ``$1,500'' to avoid the need to update this rule if the bankruptcy 
rule is changed.
    Response: EOUST concurs and has modified the rule accordingly.
37. Authority To Mandate Uniform NFR
    Comment: One comment questioned whether EOUST had authority to 
promulgate a rule requiring a uniform notice of a report. Additionally, 
this comment stated the form of the notice may not meet with all 
courts' requirements.
    Response: The NFR is integrally connected with the TFR and TDR. One 
of the primary purposes for a trustee to file a final report is to 
allow parties in interest to review and comment on the trustee's 
administration of the case. However, parties in interest do not receive 
a copy of the final report; they only receive the notice of the final 
report. Therefore, it is very important that this notice be adequate to 
inform them of their rights and the trustee's proposed distribution of 
assets. EOUST notes that AOUSC and EOUST currently have a memorandum of 
understanding that delineates the format of the NFR. EOUST will work 
with the courts to accommodate any procedural changes needed to meet a 
local court's requirements.
38. Court Notice
    Comment: One comment questioned whether courts will notice the TFR 
and application for compensation to interested parties.
    Response: Local court practice governs who has the responsibility 
to send the notice.

E. UST Form 101-7-TDR

39. Redundant Information
    Comment: One comment stated that the information required on the 
TDR is redundant with the information required on the TFR.
    Response: The TFR concerns the trustee's proposed distribution, 
which can change. The TDR is the report that details the trustee's 
final and actual distribution. Therefore, it is necessary to have the 
data, while similar, on both reports.
40. Form 1
    Comment: One comment questioned the requirement to file same 
individual property record that was submitted with the TFR.
    Response: EOUST recognizes that the Form 1 filed with the TDR is 
essentially the same Form 1 filed with the TFR. However, it is useful 
to have the trustee's final account--the TDR--contain a complete record 
of the administration of the case, including the disposition of 
property, as well as the flow of funds, in one document. Since the Form 
1 is readily available in the trustee's own electronic records, it is a 
minimal burden to include it with the TDR.
41. Form 2
    Comment: One comment questioned the requirement to file receipts 
and disbursements on the TDR when it would just show the debits to the 
account of the checks issued per the TFR; the bank statements submitted 
with the TDR support this process.
    Response: The Form 2 filed with the TDR is different from the Form 
2 filed with the TFR in one important respect: the Form 2 filed with 
the TDR shows the actual distribution of funds. The Form 2 filed with 
the TFR does not contain that information, which is a critical element 
of the final account. Although the bank statements contain the same 
information, they are not always available in electronic form or simple 
to summarize or categorize.

F. Chapters 12 and 13 Uniform Forms

42. Statistics--Value of Assets Abandoned
    Comment: One comment stated that in many districts standing 
trustees do not abandon assets; they merely consent to the stay being 
lifted. Due to this practice, the ``value of assets abandoned by court 
order'' will yield invalid statistics if it includes the value of 
assets when the trustee consents to the stay being lifted.
    Response: Trustees in chapter 12 and chapter 13 generally do not 
abandon assets. However, a court may occasionally direct a trustee to 
do so, and then the trustee should enter the value of the asset under 
this data element. In the interests of setting a uniform standard that 
is reasonable, EOUST defined ``assets abandoned,'' for purposes of 
reporting on the final report, as those assets abandoned by a court 
order pursuant to 11 U.S.C. 554(b). This definition does not include 
instances where a trustee consents to the stay being lifted. Answers to 
questions such as this about how to complete the Uniform Forms and the 
meaning of terms or phrases are contained in the instructions that 
accompany the forms. The instructions are available on EOUST's Web site 
at www.usdoj.gov/ust.
43. Statistics--Value of Assets Exempted
    Comment: One comment stated that the ``value of assets exempted'' 
will be skewed since some debtors claim the value of their exemptions 
as 100% without stating a value.
    Response: As required under the BAPCPA, EOUST is attempting to 
balance the reasonable needs of the public for information with the 
need not to unduly burden the standing trustees who must file the final 
reports. In the interests of setting a uniform standard that is 
reasonable and would not require

[[Page 58443]]

the standing trustee expending significant additional resources, EOUST 
defined assets exempted as the total value of assets listed as exempt 
on the debtor's Schedule C, unless revised pursuant to a court order.
44. Statistics--Claims Discharged Without Payment
    Comment: One comment stated that the unsecured claims discharged 
without payment will be skewed since it is unclear whether the amount 
of general unsecured claims discharged without payment refers to amount 
of claims filed and not paid or to amount of claims scheduled and not 
paid.
    Response: EOUST will post Instructions on how to complete the final 
report form on its Web site. Those Instructions clarify that this 
element is generally the total scheduled unsecured claims plus non-
scheduled unsecured claims where a proof of claim was filed, minus 
payments on unsecured claims, with specified adjustments to that 
amount.
45. Statistics--Debt Secured by Vehicle
    Comment: One comment stated that the debt secured by vehicles will 
be unreliable since some debtors have vehicles and other collateral 
securing the loan.
    Response: This comment raises a valid point. EOUST will provide 
further guidance on issues such as this in the Instructions that will 
be posted on EOUST's Web site.
46. Checks Clearing Bank
    Comment: One comment stated that the chapter 13 standing trustee's 
final report form needs to be modified to allow for the possibility 
that when a debtor converts from chapter 13 to chapter 7, not all 
checks have cleared the bank when the standing trustee files the final 
report.
    Response: EOUST will post Instructions on how to complete the final 
report form on its Web site. Those Instructions clarify that this 
paragraph may be altered to indicate that not all checks have cleared 
the bank if the case is converted to another chapter.
47. Questions
    Comment: One comment had several questions about how to complete 
the final report.
    Response: EOUST will post Instructions on how to complete the final 
report on its Web site. Also, individuals may contact EOUST with 
specific questions about the final report.
48. Cost of Report
    Comment: One comment stated that it will cost more than $7.00 to 
complete the report and that more staff may be necessary.
    Response: The estimated increase in costs to the standing trustee 
of approximately $7.00 per final report is a blended rate based on 
discussions with standing trustees. Some standing trustees were already 
entering scheduled claims information and others were not. If the 
standing trustee had not been entering scheduled claims information, 
his or her additional costs will be greater than the $7.00.
49. Differences Between Chapter 12 and Chapter 13 Uniform Forms
    Comment: One comment questioned whether there were substantive 
differences between the chapters 12 and 13 final reports. If not, then 
the comment suggested combining the forms.
    Response: There are substantive differences between the four 
proposed final report forms. Separate forms are required for case 
trustees and standing trustees because the statutory authority for 
appointing one or the other differs and the difference is reflected in 
the language of the final report forms. Further, since chapter 12 and 
chapter 13 cases are governed by different chapters of the Bankruptcy 
Code, the final report forms must be separate in order to reflect the 
correct statutory authority for the information provided.

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 a 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 (OMB.)
    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 time incurred by 
private trustees to complete the Uniform Forms. Since most of the 
information in the chapter 7 Uniform Forms is already collected in most 
districts, the additional time required to collect the requisite 
information and to complete the Uniform Forms should be minimal.\4\
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    \4\ It is estimated that completion of the chapter 7 Uniform 
Forms will take approximately the same amount of time as the current 
chapter 7 final reports. Therefore, there should not be an 
appreciable difference in costs to complete the chapter 7 Uniform 
Forms as compared to current chapter 7 final report forms.
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    In addition, the Uniform Forms will be added to the trustee case 
management software utilized by chapter 7 trustees. This software is 
provided to chapter 7 trustees by various banks free of charge in 
exchange for trustees depositing estate funds in these banks. For 
chapter 12 and chapter 13 trustees, it is anticipated that an increase 
in costs will be incurred due to the usage of these chapters 12 and 13 
Uniform Forms. However, any associated cost will be an approved 
administrative expense of a standing trustee's trust operation.\5\ It 
is estimated that the cost to the government for developing these 
Uniform Forms is approximately $20,000. The estimated cost to develop a 
system to store information extracted from these forms, and to analyze 
the data, is approximately $650,000. Over the next several years, the 
EOUST anticipates utilizing base resources available for information 
technology to meet the costs associated with developing the Uniform 
Forms and a system to store the information extracted from the forms. 
There will be no additional cost to the government. In fact, this rule 
will reduce the costs to the government of compiling the information 
submitted by private trustees. Since the Uniform Forms will be data 
enabled, the current system of manually compiling case closing 
information will be replaced by a less time intensive automated system.
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    \5\ Please see the Regulatory Flexibility Act section for an 
explanation of the chapters 12 and 13 Uniform Forms costs.
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    The benefits of this rule include establishing national uniformity 
in the final reports submitted by trustees, which will enable Congress, 
and the general public, to obtain more detailed information regarding 
bankruptcy cases nationally. This rule will enable Congress and the 
public to identify, among other things, the amount of debt scheduled in 
bankruptcy cases, the percentage of claims paid to creditors, the 
amount of debt discharged, and the value of assets abandoned by 
trustees.

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.

[[Page 58444]]

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 
605(b)), the Director has reviewed this rule and certifies that none of 
the Uniform Forms will have a significant economic impact on a 
substantial number of small entities. This rule imposes requirements 
only upon approximately 1,400 trustees. In addition, trustees already 
submit to the court essentially the same information as that required 
by this rule though formats vary in judicial districts. This rule 
simply creates uniform forms for all trustees to use throughout the 
country rather than local court forms.
    For chapter 12 and chapter 13 trustees, it is estimated that there 
will be an increase in costs in the amount of approximately $7.00 per 
final report. However, this is less than 1% of chapters 12 and 13 
trustees' total operating expenses. Chapters 12 and 13 standing 
trustees allocate this cost toward an annual budget, which means 
trustees deduct this cost from funds disbursed from debtors' estates to 
creditors. Thus, the chapters 12 and 13 Uniform Forms will not have a 
significant economic impact upon standing trustees.\6\
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    \6\ Chapters 12 and 13 case trustees closed less than .001% of 
chapters 12 and 13 cases in fiscal year 2007.
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Paperwork Reduction Act

    These forms are associated with an open bankruptcy case. Therefore, 
the exemption under 5 CFR 1320.4(a)(2) applies.

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 ($123 million in 2005, 
adjusted annually for inflation). 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.

Privacy Act Statement

    28 U.S.C. 589b authorizes the collection of the information in the 
final reports. As part of the trustee's reporting to the court, the 
United States Trustee, and creditors concerning the trustee's 
administration of the bankruptcy estate, the United States Trustee will 
review the information contained in these reports. The United States 
Trustee will not share the information with any other entity unless 
authorized under the Privacy Act, 5 U.S.C. 552a et seq. EOUST has 
published a System of Records Notice that delineates the routine use 
exceptions authorizing disclosure of information. See 71 FR 59818, 
59822 (Oct. 11, 2006), JUSTICE/UST-002, ``Bankruptcy Trustee Oversight 
Records.'' Providing this information is mandatory under 11 U.S.C. 704.

List of Subjects in 28 CFR Part 58

    Bankruptcy; Trusts and Trustees.

0
For the reasons set forth in the preamble, 28 CFR Part 58 is amended as 
set forth below:

PART 58--[AMENDED]

0
1. The authority citation for Part 58 is revised 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 section 58.7 to read as follows:


Sec.  58.7  Procedures for Completing Uniform Forms of Trustee Final 
Reports in Cases Filed Under Chapters 7, 12, and 13 of the Bankruptcy 
Code.

    (a) UST Form 101-7-TFR, Chapter 7 Trustee's Final Report. A chapter 
7 trustee must complete UST Form 101-7-TFR final report (TFR) in 
preparation for closing an asset case. This report must be submitted to 
the United States Trustee after liquidating the estate's assets, but 
before making distribution to creditors, and before filing it with the 
United States Bankruptcy Court. The TFR must contain the trustee's 
certification, under penalty of perjury, that all assets have been 
liquidated or properly accounted for and that funds of the estate are 
available for distribution. Pursuant to 28 U.S.C. 589b(d), the TFR must 
also contain the following:
    (1) Summary of the trustee's case administration;
    (2) Copies of the estate's financial records;
    (3) List of allowed claims;
    (4) Fees and administrative expenses; and
    (5) Proposed dividend distribution to creditors.
    (b) UST Form 101-7-NFR Chapter 7 Trustee's Notice of Trustee's 
Final Report. After the TFR has been reviewed by the United States 
Trustee and filed with the United States Bankruptcy Court, if the net 
proceeds realized in an estate exceed the amounts specified in Fed. R. 
Bankr. P. 2002(f)(8), UST Form 101-7-NFR (NFR) must be sent to all 
creditors as the notice required under Fed. R. Bankr. P. 2002(f). The 
NFR must show the receipts, approved disbursements, and any balance 
identified on the TFR, as well as the information required in the TFR's 
Exhibit D. In addition, the NFR must identify the procedures for 
objecting to any fee application or to the TFR.
    (c) UST Form 101-7-TDR Chapter 7 Trustee's Final Account, 
Certification The Estate Has Been Fully Administered and Application of 
Trustee To Be Discharged. After distributing all estate funds, a 
trustee must submit to the United States Trustee and file with the 
United States Bankruptcy Court the trustee's final account, UST Form 
101-7-TDR (TDR). The TDR must contain the trustee's certification, 
under penalty of perjury, that the estate has been fully administered 
and the trustee's request to be discharged as trustee. Pursuant to 28 
U.S.C. 589b(d), the TDR must also include the following:
    (1) The length of time the case was pending;
    (2) Assets abandoned;
    (3) Assets exempted;
    (4) Receipts and disbursements of the estate;
    (5) Claims asserted;
    (6) Claims allowed; and,
    (7) Distributions to claimants and claims discharged without 
payment, in each case by appropriate category.
    (d) UST Form 101-7-NDR Chapter 7 Trustee's Report of No 
Distribution. In cases where there is no distribution of funds the case 
trustee must submit to the United States Trustee and file with the 
United States Bankruptcy Court UST Form 101-7-NDR (NDR). The NDR must 
contain the trustee's certification that the estate has been fully 
administered, that the trustee has neither received nor disbursed any 
property or money on account of the estate, and that there is no 
property available for distribution over and above that exempted by 
law. In addition, the NDR must set forth the

[[Page 58445]]

trustee's request to be discharged as trustee. Pursuant to 28 U.S.C. 
589b(d), the NDR must also include the following information:
    (1) The length of time the case was pending;
    (2) Assets abandoned;
    (3) Assets exempted;
    (4) Claims asserted;
    (5) Claims scheduled; and,
    (6) claims scheduled to be discharged without payment.
    (e) UST Form 101-12-FR-S, Chapter 12 Standing Trustee's Final 
Report and Account and UST Form 101-13-FR-S, Chapter 13 Standing 
Trustee's Final Report and Account. After the final distribution to 
creditors in a chapter 12 or 13 case in which a standing trustee has 
been appointed, a trustee must submit to the United States Trustee and 
file with the United States Bankruptcy Court either UST Form 101-12-FR-
S for chapter 12 cases or UST Form 101-13-FR-S for chapter 13 cases, 
which are the trustee's final report and account. In these forms, a 
trustee must include a certification that the estate has been fully 
administered if not converted to another chapter and a request to be 
discharged as trustee. Pursuant to 28 U.S.C. 589b(d), these forms must 
also include the following information:
    (1) The length of time the case was pending;
    (2) Assets abandoned;
    (3) Assets exempted;
    (4) Receipts and disbursements of the estate;
    (5) Expenses of administration, including for use under section 
707(b), actual costs of administering cases under chapter 12 or 13 (as 
applicable) of title 11;
    (6) Claims asserted;
    (7) Claims allowed;
    (8) Distributions to claimants and claims discharged without 
payment, in each case by appropriate category;
    (9) Date of confirmation of the plan;
    (10) Date of each modification thereto; and,
    (11) Defaults by the debtor in performance under the plan.
    (f) UST Form 101-12-FR-C, Chapter 12 Case Trustee's Final Report 
and Account, and UST Form 101-13-FR-C, Chapter 13 Case Trustee's Final 
Report and Account. After the final distribution to creditors in a 
chapter 12 or 13 case in which a case trustee has been appointed, the 
trustee must submit to the United States Trustee and file with the 
United States Bankruptcy Court either UST Form 101-12-FR-C for chapter 
12 cases, or UST Form 101-13-FR-C for chapter 13 cases, which are the 
trustee's final report and account. In these forms, a trustee must 
include a certification, submitted under penalty of perjury, that the 
estate has been fully administered if not converted to another chapter 
and the trustee's request to be discharged from further duties as 
trustee. Pursuant to 28 U.S.C. 589b(d), these forms must also include 
the following information:
    (1) The length of time the case was pending;
    (2) Assets abandoned;
    (3) Assets exempted;
    (4) Receipts and disbursements of the estate;
    (5) Expenses of administration, including for use under section 
707(b), actual costs of administering cases under chapter 12 or 13 (as 
applicable) of title 11;
    (6) Claims asserted;
    (7) Claims allowed;
    (8) Distributions to claimants and claims discharged without 
payment, in each case by appropriate category;
    (9) Date of confirmation of the plan;
    (10) Date of each modification thereto; and,
    (11) defaults by the debtor in performance under the plan.
    (g) Mandatory Usage of Uniform Forms. The Uniform Forms associated 
with this rule must be utilized by trustees when completing their final 
reports and final accounts. All trustees serving in districts where a 
United States Trustee is serving must use the Uniform Forms in the 
administration of their cases, in the same manner, and with the same 
content, as set forth in this rule:
    (1) All Uniform Forms may be electronically or mechanically 
reproduced so long as all the content and the form remain consistent 
with the Uniform Forms as they are posted on EOUST's Web site;
    (2) The Uniform Forms shall be filed via the United States 
Bankruptcy Courts Case Management/Electronic Case Filing System (CM/
ECF) as a ``smart form'' meaning the forms are data enabled, unless the 
court offers an automated process that has been approved by EOUST, such 
as the virtual NDR event through CM/ECF.

    Dated: September 30, 2008.
Clifford J. White, III,
Director, Executive Office for United States Trustees.
 [FR Doc. E8-23700 Filed 10-6-08; 8:45 am]
BILLING CODE 4410-40-P