11 U.S.C. § 308 — Debtor reporting requirements

Page 51 TITLE 11—BANKRUPTCY § 308 tion. This section recognizes that there are cases in which it would be appropriate for the court to decline jurisdiction. Abstention under this section, however, is of jurisdiction over the entire case. Abstention from ju- risdiction over a particular proceeding in a case is gov- erned by proposed 28 U.S.C. 1471(c). Thus, the court is permitted, if the interests of creditors and the debtor would be better served by dismissal of the case or sus- pension of all proceedings in the case, to so order. The court may dismiss or suspend under the first para- graph, for example, if an arrangement is being worked out by creditors and the debtor out of court, there is no prejudice to the results of creditors in that arrange- ment, and an involuntary case has been commenced by a few recalcitrant creditors to provide a basis for future threats to extract full payment. The less expensive out- of-court workout may better serve the interests in the case. Likewise, if there is pending a foreign proceeding concerning the debtor and the factors specified in pro- posed 11 U.S.C. 304(c) warrant dismissal or suspension, the court may so act. Subsection (b) gives a foreign representative author- ity to appear in the bankruptcy court to request dis- missal or suspension. Subsection (c) makes the dis- missal or suspension order nonreviewable by appeal or otherwise. The bankruptcy court, based on its experi- ence and discretion is vested with the power of deci- sion. Editorial Notes AMENDMENTS 2005—Subsec. (a)(2). Pub. L. 109–8 added par. (2) and struck out former par. (2) which read as follows: ‘‘(2)(A) there is pending a foreign proceeding; and ‘‘(B) the factors specified in section 304(c) of this title warrant such dismissal or suspension.’’ 1991—Subsec. (c). Pub. L. 102–198 substituted ‘‘title 28’’ for ‘‘this title’’ in two places. 1990—Subsec. (c). Pub. L. 101–650 inserted before pe- riod at end ‘‘by the court of appeals under section 158(d), 1291, or 1292 of this title or by the Supreme Court of the United States under section 1254 of this title’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109–8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under this title before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title. § 306. Limited appearance An appearance in a bankruptcy court by a for- eign representative in connection with a peti- tion or request under section 303 or 305 of this title does not submit such foreign representa- tive to the jurisdiction of any court in the United States for any other purpose, but the bankruptcy court may condition any order under section 303 or 305 of this title on compli- ance by such foreign representative with the or- ders of such bankruptcy court. (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2561; Pub. L. 109–8, title VIII, § 802(d)(5), Apr. 20, 2005, 119 Stat. 146.) HISTORICAL AND REVISION NOTES SENATE REPORT NO. 95–989 Section 306 permits a foreign representative that is seeking dismissal or suspension under section 305 of an ancillary case or that is appearing in connection with a petition under section 303 or 304 to appear without subjecting himself to the jurisdiction of any other court in the United States, including State courts. The protection is necessary to allow the foreign representa- tive to present his case and the case of the foreign es- tate, without waiving the normal jurisdictional rules of the foreign country. That is, creditors in this country will still have to seek redress against the foreign estate according to the host country’s jurisdictional rules. Any other result would permit local creditors to obtain unfair advantage by filing an involuntary case, thus re- quiring the foreign representative to appear, and then obtaining local jurisdiction over the representative in connection with his appearance in this country. That kind of bankruptcy law would legalize an ambush tech- nique that has frequently been rejected by the common law in other contexts. However, the bankruptcy court is permitted under section 306 to condition any relief under section 303, 304, or 305 on the compliance by the foreign representa- tive with the orders of the bankruptcy court. The last provision is not carte blanche to the bankruptcy court to require the foreign representative to submit to juris- diction in other courts contrary to the general policy of the section. It is designed to enable the bankruptcy court to enforce its own orders that are necessary to the appropriate relief granted under section 303, 304, or 305. Editorial Notes AMENDMENTS 2005—Pub. L. 109–8 struck out ‘‘, 304,’’ after ‘‘section 303’’ in two places. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109–8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under this title before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title. § 307. United States trustee The United States trustee may raise and may appear and be heard on any issue in any case or proceeding under this title but may not file a plan pursuant to section 1121(c) of this title. (Added Pub. L. 99–554, title II, § 205(a), Oct. 27, 1986, 100 Stat. 3098.) Statutory Notes and Related Subsidiaries EFFECTIVE DATE Effective date and applicability of section dependent upon the judicial district involved, see section 302(d), (e) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure. STANDING AND AUTHORITY OF BANKRUPTCY ADMINISTRATOR Pub. L. 101–650, title III, § 317(b), Dec. 1, 1990, 104 Stat. 5115, provided that: ‘‘A bankruptcy administrator may raise and may appear and be heard on any issue in any case under title 11, United States Code, but may not file a plan pursuant to section 1121(c) of such title.’’ § 308. Debtor reporting requirements (a) For purposes of this section, the term ‘‘profitability’’ means, with respect to a debtor, the amount of money that the debtor has earned or lost during current and recent fiscal periods. (b) A debtor in a small business case shall file periodic financial and other reports containing information including— (1) the debtor’s profitability; Page 52 TITLE 11—BANKRUPTCY § 321 (2) reasonable approximations of the debtor’s projected cash receipts and cash disburse- ments over a reasonable period; (3) comparisons of actual cash receipts and disbursements with projections in prior re- ports; (4) whether the debtor is— (A) in compliance in all material respects with postpetition requirements imposed by this title and the Federal Rules of Bank- ruptcy Procedure; and (B) timely filing tax returns and other re- quired government filings and paying taxes and other administrative expenses when due; (5) if the debtor is not in compliance with the requirements referred to in paragraph (4)(A) or filing tax returns and other required government filings and making the payments referred to in paragraph (4)(B), what the fail- ures are and how, at what cost, and when the debtor intends to remedy such failures; and (6) such other matters as are in the best in- terests of the debtor and creditors, and in the public interest in fair and efficient procedures under chapter 11 of this title. (Added Pub. L. 109–8, title IV, § 434(a)(1), Apr. 20, 2005, 119 Stat. 111; amended Pub. L. 111–327, § 2(a)(10), Dec. 22, 2010, 124 Stat. 3558.) Editorial Notes REFERENCES IN TEXT The Federal Rules of Bankruptcy Procedure, referred to in subsec. (b)(4)(A), are set out in the Appendix to this title. AMENDMENTS 2010—Subsec. (b). Pub. L. 111–327, § 2(a)(10)(A), sub- stituted ‘‘debtor in a small business case’’ for ‘‘small business debtor’’ in introductory provisions. Subsec. (b)(4) to (6). Pub. L. 111–327, § 2(a)(10)(B), struck out subpar. (A) designation before ‘‘whether the debtor’’ in par. (4) and redesignated cls. (i) and (ii) of former subpar. (A) as subpars. (A) and (B), respectively, redesignated former subpars. (B) and (C) of par. (4) as pars. (5) and (6), respectively, and, in par. (5), sub- stituted ‘‘paragraph (4)(A)’’ for ‘‘subparagraph (A)(i)’’ and ‘‘paragraph (4)(B)’’ for ‘‘subparagraph (A)(ii)’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Pub. L. 109–8, title IV, § 434(b), Apr. 20, 2005, 119 Stat. 111, provided that: ‘‘The amendments made by sub- section (a) [enacting this section] shall take effect 60 days after the date on which rules are prescribed under section 2075 of title 28, United States Code, to establish forms to be used to comply with section 308 of title 11, United States Code, as added by subsection (a) [See Bankruptcy Form No. 25C, eff. Dec. 1, 2008].’’ SUBCHAPTER II—OFFICERS § 321. Eligibility to serve as trustee (a) A person may serve as trustee in a case under this title only if such person is— (1) an individual that is competent to per- form the duties of trustee and, in a case under chapter 7, 12, or 13 of this title, resides or has an office in the judicial district within which the case is pending, or in any judicial district adjacent to such district; or (2) a corporation authorized by such corpora- tion’s charter or bylaws to act as trustee, and, in a case under chapter 7, 12, or 13 of this title, having an office in at least one of such dis- tricts. (b) A person that has served as an examiner in the case may not serve as trustee in the case. (c) The United States trustee for the judicial district in which the case is pending is eligible to serve as trustee in the case if necessary. (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2561; Pub. L. 98–353, title III, § 428, July 10, 1984, 98 Stat. 369; Pub. L. 99–554, title II, §§ 206, 257(c), Oct. 27, 1986, 100 Stat. 3098, 3114.) HISTORICAL AND REVISION NOTES LEGISLATIVE STATEMENTS Section 321 indicates that an examiner may not serve as a trustee in the case. SENATE REPORT NO. 95–989 Section 321 is adapted from current Bankruptcy Act § 45 [section 73 of former title 11] and Bankruptcy Rule 209. Subsection (a) specifies that an individual may serve as trustee in a bankruptcy case only if he is com- petent to perform the duties of trustee and resides or has an office in the judicial district within which the case is pending, or in an adjacent judicial district. A corporation must be authorized by its charter or by- laws to act as trustee, and, for chapter 7 or 13 cases, must have an office in any of the above mentioned judi- cial districts. Editorial Notes AMENDMENTS 1986—Subsec. (a). Pub. L. 99–554, § 257(c), inserted ref- erence to chapter 12 in two places. Subsec. (c). Pub. L. 99–554, § 206, added subsec. (c). 1984—Subsec. (b). Pub. L. 98–353 substituted ‘‘the case’’ for ‘‘a case’’ after ‘‘an examiner in’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1986 AMENDMENT Effective date and applicability of amendment by sec- tion 206 of Pub. L. 99–554 dependent upon the judicial district involved, see section 302(d), (e) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure. Amendment by section 257 of Pub. L. 99–554 effective 30 days after Oct. 27, 1986, but not applicable to cases commenced under this title before that date, see sec- tion 302(a), (c)(1) of Pub. L. 99–554. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title. § 322. Qualification of trustee (a) Except as provided in subsection (b)(1), a person selected under section 701, 702, 703, 1104, 1163, 1183, 1202, or 1302 of this title to serve as trustee in a case under this title qualifies if be- fore seven days after such selection, and before beginning official duties, such person has filed with the court a bond in favor of the United States conditioned on the faithful performance of such official duties. (b)(1) The United States trustee qualifies wherever such trustee serves as trustee in a case under this title.