Source: https://lundinonchapter13.com/Home/DisplaySectionContent?sectionNumber=53.4
Timestamp: 2019-07-16 12:42:52
Document Index: 230768753

Matched Legal Cases: ['§ 53', '§ 586', '§ 157', '§ 58', '§ 53', '§ 586']

53.4 - Procedure for Removal after BAPCPA
§ 53.4 — Procedure for Removal after BAPCPA
After years of controversy with respect to the procedures and conditions for removal of a Chapter 13 trustee,1 BAPCPA added this provision for judicial review of a decision by the U.S. trustee to terminate or stop assigning cases to a Chapter 13 trustee:
A trustee whose appointment under . . . [28 U.S.C. § 586(b)] is terminated or who ceases to be assigned to cases filed under title 11, United States Code, may obtain judicial review of the final agency decision by commencing an action in the district court of the United States for the district . . . in which the trustee is appointed . . . after first exhausting all available administrative remedies, which if the trustee elects, shall also include an administrative hearing on the record. Unless the trustee elects to have an administrative hearing on the record, the trustee shall be deemed to have exhausted all administrative remedies for purposes of this paragraph if the agency fails to make a final agency decision within 90 days after the trustee requests administrative remedies. The Attorney General shall prescribe procedures to implement this paragraph. The decision of the agency shall be affirmed by the district court unless it is unreasonable and without cause based on the administrative record before the agency.2
At this writing, procedures to implement this new provision are not finally prescribed by the Attorney General. The standard for judicial review—that the agency decision must be “unreasonable and without cause”—is rigorous. There is a premium on careful participation in the administrative procedures because judicial review is “based on the administrative record before the agency.”
An action for judicial review is commenced in the district court. BAPCPA made no change to 28 U.S.C. § 157 to indicate whether an action in the district court for judicial review of a decision to terminate or cease assigning cases to a Chapter 13 trustee would/could be referred to the bankruptcy judges for the district.
1 See § 58.3 [ Removal and Liability of a Trustee ] § 53.3 Removal and Liability of Trustee.
2 28 U.S.C. § 586(d)(2).
In re Denton, 370 B.R. 441, 444 (Bankr. S.D. Ga. June 12, 2007) (Dalis) (A Chapter 13 trustee enjoys derived judicial immunity from damages and injunctive relief with respect to disbursement errors. Debtor's counsel filed motion for contempt against Chapter 13 trustee based on disbursement errors that resulted in shortfall of money to pay attorney fees for two months. "Just as judges are absolutely immune from suit in the exercise of their judicial authority, so also are non-judicial officers absolutely immune when they exercise discretionary judgments that are functionally comparable to those of judges. . . . This derived judicial immunity is not limited to actions for damages, but also extends to requests for injunctive relief. . . . Here, the Trustee's disbursement errors occurred during her administration of the estate under the Bankruptcy Code as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA"). The Trustee inadvertently overpaid secured creditors when she attempted to conform her computerized disbursement calculations in this case to the Plan and to the BAPCPA disbursement scheme. . . . Because of the overpayments, no money was disbursed for attorney's fees for a period of two months. The Trustee's exercise of discretionary judgment in attempting to reconcile conflicting disbursement schemes with the debtor's Plan is functionally comparable to the discretion exercised by judges. The Trustee thus cannot be sued for her disbursement errors.").