Trustees Are Not Needed in Every Chapter 11 Case to Prevent DIP Abuse According to Latest ABI Quick Poll
Alexandria, Va.— A clear majority of respondents in a recent ABI Quick Poll do not think that a trustee should be appointed in every chapter 11 case, at least as a check on a debtor in possession (DIP) with more limited management authority. Sixty-four percent disagreed (47 percent “strongly” and 17 percent “somewhat”) that the DIP model has proven too susceptible to abuse and thereby warrants a trustee to be appointed in every chapter 11 case. The DIP model in U.S. bankruptcy law allows a person or corporation who has filed a bankruptcy petition to remain in possession of property upon which a creditor has a lien or similar security interest. Some critics of this model have suggested that a trustee be appointed in every chapter 11 to at least provide oversight for a DIP with limited management authority. Conversely, 32 percent of the respondents (19 percent “strongly” and 13 percent “somewhat”) believe that a trustee should be appointed in every chapter 11 case to prevent abuse by a DIP. Two percent did not know or had no opinion on the Quick Poll. ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://www.abiworld.net/quickpoll/ to access the results of previous ABI Quick Polls. ### ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes over 13,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.
Friday, May 18, 2012