By: Donald L Swanson
“Those with business, managerial, consulting, mediation and operational experience are encouraged to apply.”
–From “Solicitation” by U.S. Trustee for Applicants to Serve as Subchapter V Trustees (emphasis added)
Back in August of this year, the Small Business Reorganization Act of 2019 became law. It’s effective date is 180 days later—February 19, 2020.
The new law establishes a “trustee” role for small business cases and authorizes the U.S. Trustee to appointment “an individual“ to “serve as standing trustee in cases under this subchapter.”
Solicitation for Trustees
So, the U.S. Trustee recently published a notice titled, “Solicitation of Applicants to Serve as Subchapter V Trustees.” Information in such notice includes the following:
- The United States Department of Justice, Office of the United States Trustee, seeks resumes from persons wishing to be considered for inclusion in a pool of trustees who may be appointed on a case-by-case basis to administer cases filed under the Small Business Reorganization Act of 2019 (Subchapter V).
- To be eligible for inclusion in the Subchapter V trustee pool, an applicant must possess strong administrative, financial and interpersonal skills.
- Those with business, managerial, consulting, mediation and operational experience are encouraged to apply.
Emphasis added. [Note: As of this publication, the deadline to apply has expired.]
Anyone interested in bankruptcy mediation has to be thrilled with the reference to “mediation” in this Solicitation document.
And it’s inclusion makes sense. After all:
- one of the statutory duties of a small business trustee is to “facilitate the development of a consensual plan of reorganization” (11 U.S.C. § 1183(b)(7)); and
- “facilitating” the development of “consensual” arrangements is precisely what mediators do!
How to Facilitate
So, the question, now, is this: How, exactly, should a Trustee go about facilitating a consensual plan?
Practical and professional considerations for answering the question, include the following:
- Is the trustee to act as a mediator, or fill a mediator-ish role, in the case of appointment?
- Is a trustee able to serve as a third-party neutral in the case of appointment? If total neutrality is not possible, can the trustee fill a mediator-ish role?
- Should the trustee encourage debtors and creditors to retain a private mediator? If so, how would compensation work?
- Could one trustee in the “pool of trustees” serve as mediator in a case where another trustee from the same pool is appointed? If so, how would compensation work?
- Should the appointed trustee encourage debtors and creditors to utilize a judicial mediator?
The Mediation Committee of the American Bankruptcy Institute is contemplating such questions. If anyone has input on this subject, the Committee would love to hear it! Please send your input to me, and I’ll pass it along.
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