Tuesday, May 24, 2011

Chapter 11 Trustee Appointment

While it is not common practice some chapter 11 cases have trustees appointed.  A recent decision from the 4th Circuit goes into the appointment of a trustee.  (In re TP, Inc.)  In that case the creditors convinced the court that the company had been mismanaged and the Debtor-In-Possession failed to properly file monthly reports or otherwise cooperate with the U.S. Trustee or creditors.  Let this be a warning that if you choose to file for chapter 11 protection you should be ready to do what is required to stay in the chapter 11. 

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