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Interpreting USTP Help Wanted

posted by Katie Porter

I concede at the outset that I might be reading too much into one paragraph. However, the "Career Opportunites" section (otherwise known as "want ads") in the Wall Street Journal on Feb. 13, 2007 had a posting for an Assistant U.S. Trustee in Boise, Idaho that contained a job description that I found a bit troubling. Here it is:

Incumbent is responsible for the administrative and legal management of the Boise, ID, United States Trustee Office, including the supervision of personnel assigned to the office; the implementation of civil enforcement strategies to combat fraud and abuse in the bankruptcy system; as well as the new provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005; the administration of cases filed under Chapters 7, 11, 12, and 13 of the Bankruptcy Code; representing the United States Trustee in court; maintaining and supervising a panel of private trustees; supervising the conduct of debtors; and ensuring that violations of law are referred to the United States Attorneys for possible prosecution.

Two things about the description caught my eye. First, notice the second-to-last phrase "supervising the conduct of debtors." Um . . . what about supervising the conduct of CREDITORS? Are they not required to follow the Bankruptcy Code and Rules? Surely, they are. Think about the past role of the US Trustee in seek sanctions against creditors who obtained illegal "reaffirmation" agreements (See In re Lantanowich, 207 BR 326 Bankr. D. Mass. 1997) or who routinely violated the discharge injunction. Are new hires not required or permitted to undertake such tasks? Also, I'm a bit troubled by the phrase 'supervise the conduct' of debtors. What exactly does this mean--make sure that they don't pay with plastic? that they dress appropriately at the 341 meeting? Debtors are required to abide by the Bankruptcy Code, but nothing in the law says they need to have their conduct "supervised." They are debtors, not parolees. The second thing that I noted was the prominence of fraud/abuse/prosecution references in the advertisement. New hires are charged with "implementation of civil enforcement strategies" and "ensuring that violations of law are referred . . for possible prosecution." Obviously, this watchdog role is an important and legitimate part of a US Trustee's job but it seems like this ad has the same hint of "Big (Bad?) U.S. Trustee" that I blogged about a while back. One final note--the job pays a salary that I thought looked appealing on my academic salary ($104,826-$141,900) and will hopefully attract an excellent lawyer to the position. 


The Diogenes quest of old is in need of a refresher today, for, "who is watching the watchers".

Recently Judge Judith Fitzgerald made a comment on how the Silence of the Dept of Justice aided fraud. Where there was millions in over billing by a company and the US Trustee who is the "policing" agent of the Courts failed to notify the judge, even though the case was on going for more than a year.

The "watchdog" part of the USTP came into effect with the Janet Reno Reform Act of 1994, that made the USTP the "watchdog" of public equity estates.

Your reflections on the "biased" approach of the system is correct. While it does not go far enough. It is true, that the system hunts fraud by persons. If you will look back, the USTP annual report by Friedman stated that the UST was successful in 10,000 cases and a recovery of $60 million ($6000 per case) Can you just imagine the cost to results ratio on that one.

The reference about Creditors (and the not referenced issue of Claims buying) are Big issues.

What you will not see, even after the Book of Eat What You Kill (The Gellene In re Bucyrus 94-20786 E D Wisc case) or the UCLA Law Proof Book on "Courting Disaster" How Competition for Big Cases is Corrupting the Bankruptcy Courts, is the higly over-looked issue of fraud by "bankruptcy rings" (In re Arkansas 3rd Cir) and failures [or worse] by US Trustee's.

The system needs a Big Congressional hearing.

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