Procedures for the United States Trustee's appointment of a Chapter 11 trustee or examiner, the creditor election under Section 1104(b), and the Subchapter V trustee under Section 1183.
(a) Appointment of trustee or examiner. Except in a case governed by subchapter V of chapter 11, an order approving the appointment of a trustee or an examiner under Section 1104(d) of the Code shall be made on application of the United States trustee. The application shall state the name of the person appointed and, to the best of the applicant's knowledge, all the person's connections with the debtor, creditors, any other party in interest, their respective attorneys and accountants, the United States trustee, or persons employed in the office of the United States trustee. The application shall state the names of the parties in interest with whom the United States trustee consulted regarding the appointment. The application shall be accompanied by a verified statement of the person appointed setting forth the person's connections with the debtor, creditors, any other party in interest, their respective attorneys and accountants, the United States trustee, or persons employed in the office of the United States trustee.
(b)(1) Election of trustee. On the timely request of a party in interest made not later than 30 days after the court orders the appointment of a trustee, the United States trustee shall convene a meeting of creditors for the purpose of electing one disinterested person to serve as trustee in the case. Fed. R. Bankr. P. 2007.1(a) and (b)(1).
Federal Rule of Bankruptcy Procedure 2007.1 addresses the appointment of a trustee in a Chapter 11 case. The rule encompasses two distinct trustee tracks that share the rule's procedural framework but operate under different substantive standards:
The two trustees serve fundamentally different functions. The Section 1104 trustee replaces the debtor in possession as the estate's operating officer. The Section 1183 Subchapter V trustee does not displace the debtor in possession; the Subchapter V trustee operates alongside the debtor in possession as a facilitator of consensual plan negotiation, monitor of estate operations, and (in some circumstances) disbursing agent for plan payments.
Under Section 1104(a), the court may order the appointment of a Chapter 11 trustee at any time after the commencement of the case and before confirmation of a plan, on request of a party in interest or the United States Trustee, after notice and a hearing. The grounds are:
Once the court orders the appointment, the United States Trustee selects the trustee under Rule 2007.1(a), consults with parties in interest, and files an application identifying the proposed trustee and disclosing the proposed trustee's connections. The court then enters an order approving the appointment.
Within 30 days after the court orders the appointment of a trustee, a party in interest may request that the United States Trustee convene a meeting of creditors to elect a trustee under Section 1104(b). The election is conducted under the procedure of Section 702 (the Chapter 7 trustee election procedure), incorporated by reference.
The election requires (i) a request by holders of at least 20% in amount of allowed unsecured claims, (ii) a quorum of holders of at least 20% in amount of allowed unsecured claims, and (iii) election by holders of a majority in amount of allowed unsecured claims represented at the meeting. The elected trustee replaces the trustee initially selected by the United States Trustee. In practice, Section 1104(b) elections are rare; the appointed trustee usually continues to serve.
Subchapter V of Chapter 11, added by the Small Business Reorganization Act of 2019, requires the appointment of a trustee in every Subchapter V case. The Section 1183 Subchapter V trustee:
The Subchapter V trustee is appointed by the United States Trustee from a panel maintained for that purpose. The rule's procedural requirements for verified statements of disinterestedness and disclosure of connections apply to Subchapter V trustees in the same manner they apply to standard Chapter 11 trustees.
Rule 2007.1(a) requires that the United States Trustee's application identify the proposed trustee and disclose, to the best of the United States Trustee's knowledge, the proposed trustee's connections with the debtor, creditors, other parties in interest, their attorneys and accountants, and personnel of the United States Trustee's office. The application must be accompanied by a verified statement by the proposed trustee personally disclosing the same categories of connections.
The disclosure obligation mirrors the structure of Rule 2014 (employment of professional persons): a two-track disclosure (by the proposing party and by the proposed appointee) with a verified statement under oath that must disclose all connections regardless of materiality. The court determines materiality on the disclosed record.
A creditors' committee files a motion under Section 1104(a) alleging that current management has engaged in self-dealing transactions inconsistent with fiduciary duties to the estate. After an evidentiary hearing, the court grants the motion and orders the appointment of a trustee. The United States Trustee files an application under Rule 2007.1(a) identifying a proposed trustee from the regional panel and disclosing connections. After 14 days for objection (and possible election within 30 days), the court enters an order approving the appointment.
A small business files a voluntary Chapter 11 petition with an election to proceed under Subchapter V. Promptly after filing, the United States Trustee files an application under Rule 2007.1(a) identifying the proposed Subchapter V trustee from the panel and providing the verified statement. The court enters an order approving the appointment. The Subchapter V trustee thereafter participates in the case alongside the debtor in possession.
Rule 2007.1 governs the procedural mechanics of trustee appointment in a population of cases that has expanded substantially since the Small Business Reorganization Act took effect in 2020. Every Subchapter V case requires a trustee appointment under the rule. The rule's disclosure requirements - the verified statement of connections - are the procedural backbone of trustee accountability, just as Rule 2014's verified-statement requirement is the procedural backbone of professional accountability.
The election procedure under Rule 2007.1(b) and Section 1104(b) is rarely invoked but remains an important creditor-protection mechanism. In a standard Chapter 11 case in which the United States Trustee selects a trustee, creditors retain the right to convene a Section 702-style election if they prefer a different candidate and can muster the statutory thresholds.
The Subchapter V trustee is not a substitute for the debtor in possession. Unlike a Section 1104 standard Chapter 11 trustee, the Subchapter V trustee does not displace the debtor in possession. The two operate alongside each other, with the Subchapter V trustee functioning as a monitor and consensual-plan facilitator rather than as the estate's operating officer.
This page provides general information about Federal Rule of Bankruptcy Procedure 2007.1. It does not constitute legal advice. Trustee appointment, election, and Subchapter V procedural questions in any specific case should be evaluated by qualified counsel against the controlling statute, rule, and any applicable local rules.