Opinion ID: 1189498
Heading Depth: 1
Heading Rank: 1

Heading: introduction

Text: The chapter 7 [1] trustee has appealed the bankruptcy court's order of removal, which found that she was not disinterested due to a material conflict of interest She contends that the bankruptcy court applied an incorrect legal standard under § 324, and challenges the court's findings. We hold that the bankruptcy court properly applied a totality-of-circumstances test in making its determination that the trustee's prior connections with insiders negatively impacted the administration of the estate. Since disinterestedness is a requirement for service as an appointed trustee, see §§ 321(a)(1) and 701(a)(1), the court's determination that lack of such disinterestedness was a cause for her removal was a proper exercise of its broad discretion under § 324. In addition, the evidence of an appearance of impropriety, as well as the trustee's failure to disclose all of her connections, were factors contributing to a lack of creditor confidence and, thus, supported the bankruptcy court's conclusion that cause for removal existed under § 324. Therefore, we AFFIRM.