CBA Trustee Duties & Responsibilities 3

Question 1

Under 11 U.S.C. § 363(b), what is required before a trustee may sell property of the estate outside the ordinary course of business?

Accepted Answer

Notice to all parties in interest and a court hearing, followed by court approval

Answer

Written approval from a majority of unsecured creditors by dollar amount

Answer

A written opinion from the U.S. Trustee confirming the sale is in the estate's best interest

Answer

An independent appraisal filed with the court at least 30 days before the proposed sale

Question 2

Under 11 U.S.C. § 721, for how long may a trustee operate the debtor's business after the order for relief?

Accepted Answer

Only as authorized by the court for a limited period

Answer

Indefinitely, at the trustee's sole discretion to maximize estate value

Answer

For a fixed period of 180 days after the order for relief

Answer

For a maximum of 30 days without court approval, extendable by motion

Question 3

In bankruptcy administration, what is a 'surcharge' imposed on a trustee?

Accepted Answer

A reduction or elimination of the trustee's compensation as a sanction for breach of fiduciary duty or failure to properly perform statutory duties

Answer

An additional court filing fee assessed on complex multi-creditor cases

Answer

An additional assessment levied against creditors who file untimely proofs of claim

Answer

A penalty fee imposed on the debtor for concealing or transferring assets pre-petition

Question 4

Under 11 U.S.C. § 502(a), what is the default status of a properly filed proof of claim?

Accepted Answer

The claim is deemed allowed unless a party in interest files an objection

Answer

The claim is conditionally allowed pending a 60-day objection period

Answer

The claim must be independently verified by the trustee before it is allowed

Answer

The claim is disallowed until the debtor confirms the debt in a written statement

Question 5

What is the key distinction between a Chapter 7 panel trustee and a Chapter 13 standing trustee?

Accepted Answer

Panel trustees are appointed case-by-case in Chapter 7 and 11 cases; standing trustees administer all Chapter 12 and 13 cases in a district on an ongoing basis

Answer

Panel trustees handle only large asset cases; standing trustees handle consumer cases regardless of chapter

Answer

Panel trustees are full-time government employees; standing trustees are private independent contractors

Answer

There is no meaningful distinction — both are appointed by the same process and perform identical functions

Question 6

Under 11 U.S.C. § 544, the trustee's 'strong-arm' powers allow avoidance of transfers that could have been avoided by which hypothetical party as of the petition date?

Accepted Answer

A hypothetical judicial lien creditor or a bona fide purchaser of real property

Answer

A creditor who held a consensual lien perfected more than one year before filing

Answer

The U.S. Trustee acting in its supervisory capacity over the estate

Answer

Any creditor who timely filed a proof of claim in the bankruptcy case

Question 7

Under 11 U.S.C. § 330, which factors does the bankruptcy court consider when determining the reasonableness of a trustee's compensation?

Accepted Answer

The time spent, the nature and extent of services rendered, whether the services were necessary, and whether compensation is reasonable based on customary rates for comparable services

Answer

Solely the trustee's years of bankruptcy experience and professional certifications held

Answer

Only the total dollar amount recovered for the estate compared to similar cases in the district

Answer

The number of creditors, total claims filed, and the complexity rating assigned by the U.S. Trustee