Opinion ID: 2810535
Heading Depth: 3
Heading Rank: 1

Heading: motion to remove chapter 11 trustee

Text: 11 U.S.C. § 324(a) authorizes a bankruptcy court, “after notice and a hearing,” to “remove a trustee . . . for cause.” The Code does not define cause, so bankruptcy “courts are left to make the determination on a case-by-case basis.” In re Boyd, 2008 WL 4372948, at  (citation omitted). “Typical cause for removal includes incompetence, misconduct in office, conflict of interest, or other 6 violations of fiduciary duties the trustee owes to the estate and its creditors.” Id. at  (internal quotation marks and citations omitted). See also In re AFI Holding, 530 F.3d at 845 (citation omitted) (“‘cause’ may include trustee incompetence, violation of the trustee's fiduciary duties, misconduct or failure to perform the trustee’s duties, or lack of disinterestedness or holding an interest adverse to the estate”). The party seeking removal of the trustee has the “burden of establishing ‘cause’ by setting forth specific facts that support removal,” and “[c]onclusory contentions not supported by specific facts are insufficient grounds for removal of a trustee.” In re Boyd, 2008 WL 4372948, at  (citations omitted). See also Reagan v. Wetzel (In re Reagan), 403 B.R. 614, 623 (B.A.P. 8th Cir. 2009) (affirming the denial of a debtor's motion to remove a trustee where the debtor offered only “conclusory contentions unsupported by specific facts” that amounted to nothing more than a “disagree[ment] with the trustee’s business management”). The “‘[r]emoval of a trustee under § 324 is left to the sound discretion of the bankruptcy court.’” Shapiro v. French (In re Connolly N. Am., LLC), Ch. 7 Case No. 09-14179, Adv. No. 01-57090, 2010 WL 4822605, at  (Bankr. E.D. Mich. Nov. 22, 2010) (citation omitted). An abuse of this discretion occurs only “where the reviewing court has ‘a definite and firm conviction that the court below committed a clear error of judgment.’” PCFS Fin. v. Spragin (In re Nowak), 586 F.3d 450, 454 (6th Cir. 2009) (citation omitted). In the present case, the debtor failed to present any proof of undisclosed conflicts, incompetency, or wrong doing on the part of the Chapter 11 Trustee.3 Despite the lack of proof, the bankruptcy court considered the pleadings and the record as a whole, and held that cause did not exist to remove the Chapter 11 Trustee. Specifically, the bankruptcy court found that the Chapter 11 Trustee had served in this case with its large number of properties for over three years without any allegations of incompetence or of an unwillingness or inability to carry out his duties during that three-year period. The bankruptcy court also found that there was no proof demonstrating that the 3 There is no legal support for the debtor’s assertion that the Chapter 11 Trustee was required to obtain a waiver from the debtor as to any conflicts prior to appointment. The debtor failed to appeal the appointment of the Chapter 11 Trustee and did not object to the employment of the Chapter 11 Trustee’s firm. 7 Chapter 11 Trustee’s actions had fallen outside of sound business judgment. There is nothing in the record that indicates the bankruptcy court abused its discretion in denying the debtor’s motion to remove the Chapter 11 Trustee, and therefore, the bankruptcy court’s order should be affirmed.