§ 53.4 — Procedure for Removal after BAPCPA

Revised: July 3, 2007

[1]

After years of controversy with respect to the procedures and conditions for removal of a Chapter 13 trustee,1 BAPCPA added this provision for judicial review of a decision by the U.S. trustee to terminate or stop assigning cases to a Chapter 13 trustee:

A trustee whose appointment under . . . [28 U.S.C. § 586(b)] is terminated or who ceases to be assigned to cases filed under title 11, United States Code, may obtain judicial review of the final agency decision by commencing an action in the district court of the United States for the district . . . in which the trustee is appointed . . . after first exhausting all available administrative remedies, which if the trustee elects, shall also include an administrative hearing on the record. Unless the trustee elects to have an administrative hearing on the record, the trustee shall be deemed to have exhausted all administrative remedies for purposes of this paragraph if the agency fails to make a final agency decision within 90 days after the trustee requests administrative remedies. The Attorney General shall prescribe procedures to implement this paragraph. The decision of the agency shall be affirmed by the district court unless it is unreasonable and without cause based on the administrative record before the agency.2
[2]

At this writing, procedures to implement this new provision are not finally prescribed by the Attorney General. The standard for judicial review—that the agency decision must be “unreasonable and without cause”—is rigorous. There is a premium on careful participation in the administrative procedures because judicial review is “based on the administrative record before the agency.”

[3]

An action for judicial review is commenced in the district court. BAPCPA made no change to 28 U.S.C. § 157 to indicate whether an action in the district court for judicial review of a decision to terminate or cease assigning cases to a Chapter 13 trustee would/could be referred to the bankruptcy judges for the district.


 

1  See § 58.3 [ Removal and Liability of a Trustee ] § 53.3  Removal and Liability of Trustee.

 

2  28 U.S.C. § 586(d)(2).