In addition, it will not be cost effective for the Trustee's staff to pour over the books and records of the debtor to verify each claim in detail. If the discrepancy is material, an objection will be filed and the creditor will be asked to provide proof. Since administrative claims take priority, there is no great incentive for the Trustee to object to claims and seek disallowance. If creditors do not file claims, as occasionally happens when there has been a significant lapse of time from filing of the bankruptcy to recovery of assets, the Trustee may choose to file claims on behalf of creditors to make sure that there will be a fund against which his commission can be charged, so he is not forced to perform his services for free. Further, the Trustee is reviewed and reappointed annually, and his performance is judged by efficiency of administration and percentage of recoveries actually distributed to creditors.
Trustees generally object in order to meet their fiduciary duties and prevent dissipation of assets.
They are not interested in spending unreasonable amounts of time arguing with creditors over the objections, or in litigating claims. Trustees will seek the easiest and least expensive way to resolve disputes, so long as the resolution is justifiable. If that is not possible, and the claim must be litigated, the Trustee, if appointed to act as his own attorney, can bill the time spent at his normal hourly rate. If there are sufficient assets to cover that expense, the Trustee will be more inclined to fight over an issue he feels has real merit. If the assets are not sufficient to merit the battle, the Trustee will be more inclined to settle.