Application requirements, verified statement of disinterestedness, and the continuing duty to supplement.
An order approving the employment of attorneys, accountants, appraisers, auctioneers, agents, or other professionals pursuant to 11 U.S.C. Section 327, Section 1103, or Section 1114 shall be made only on application of the trustee or committee. The application shall be filed and, unless the case is a chapter 9 municipality case, a copy of the application shall be transmitted by the applicant to the United States trustee. The application shall state the specific facts showing the necessity for the employment, the name of the person to be employed, the reasons for the selection, the professional services to be rendered, any proposed arrangement for compensation, and, to the best of the applicant's knowledge, all of the person's connections with the debtor, creditors, any other party in interest, their respective attorneys and accountants, the United States trustee, or any person employed in the office of the United States trustee. The application shall be accompanied by a verified statement of the person to be employed 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 any person employed in the office of the United States trustee. Fed. R. Bankr. P. 2014(a).
Federal Rule of Bankruptcy Procedure 2014 prescribes the procedure by which professional persons are employed in a bankruptcy case under 11 U.S.C. Section 327 (trustee employment of attorneys and other professionals), Section 1103 (committee employment), and Section 1114 (retiree-committee employment). The rule operates as the procedural mechanism that gives effect to the substantive disinterestedness standard set out in Section 327(a).
The rule contemplates two coordinated documents: (1) the application itself, prepared by the trustee, debtor in possession, or committee, identifying the professional, the services to be rendered, the proposed compensation arrangement, and the professional's connections as known to the applicant; and (2) a verified statement signed by the professional disclosing the professional's own connections with the debtor, creditors, parties in interest, their attorneys and accountants, the United States Trustee, and personnel of the United States Trustee's office.
The verified statement is the operative disclosure document. It is signed under oath by the professional and must enumerate "connections" comprehensively. Courts have repeatedly held that the disclosure obligation is broader than the disqualification standard: the professional must disclose all connections and let the court determine which connections require disqualification, recusal, or limitation. Connections that are arguably innocuous still must be disclosed; the determination of materiality belongs to the court, not the disclosing professional.
The verified statement typically addresses, at minimum:
Rule 2014's disclosure duty is not satisfied at retention and frozen thereafter. The duty is continuing: when new connections become known or new relationships are formed during the case, the professional must supplement the verified statement. Courts have characterized the rule as imposing an "affirmative and ongoing" disclosure obligation. A connection that is discovered post-retention, or a relationship that newly arises post-retention, generates a supplemental disclosure obligation that operates on the same standard as the initial verified statement.
Failure to supplement when supplementation is required has been treated by reviewing courts as a basis for denial of compensation under Section 328(c), disgorgement of fees already paid, vacatur of the retention order, and in some circuits referral for disciplinary investigation.
The Chapter 7 trustee files an application to employ general counsel, special counsel, or an accountant. The application is served on the United States Trustee. The verified statement is filed concurrently. The court may approve the employment ex parte if the United States Trustee does not object within the statutory comment period set by local rule.
The debtor in possession files an application to employ general bankruptcy counsel, ordinary-course professionals under Section 327(e), special litigation counsel, financial advisors, investment bankers, and claims agents. Each retention typically requires its own application and verified statement, though some jurisdictions permit aggregate retention orders for ordinary-course professionals.
Rule 2014 is the gatekeeping rule for compensation in a bankruptcy case. A professional who is not employed under a court order entered on a Rule 2014 application cannot recover compensation from the estate under Section 330, with limited exceptions for nunc pro tunc retention in extraordinary circumstances and for professionals retained under Section 327(e) on a limited basis. The verified statement is therefore the first document the United States Trustee, the court, and reviewing parties examine when assessing the professional's eligibility to be compensated from estate funds.
The continuing duty to supplement is the second compliance pressure point. A retention that was clean at the time of approval can become problematic mid-case if a new connection is formed and not promptly disclosed. Reviewing courts treat the omission, not merely the underlying connection, as the violation.
Disclosure is broader than disqualification. The standard taught in published opinions across multiple circuits is that the disclosure obligation under Rule 2014 is broader than the disqualification standard under Section 327. Marginal connections that may not require disqualification still must be disclosed so the court can make the disqualification determination on a complete record.
This page provides general information about Federal Rule of Bankruptcy Procedure 2014. It does not constitute legal advice. Procedural posture in any specific case depends on facts and applicable local rules and should be evaluated by qualified counsel.