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Into the Depths of Deference: A Deep Dive into Competing Committee Modification Powers

Norton Annual Survey of Bankruptcy Law
November, 2019, R. Stephen McNeill and D. Ryan Slaugh

Since the creation of the United States trustee program, bankrupt companies and their creditors have wrestled with issues over whether the United States trustee or the bankruptcy court has final say over the composition of an official committee. While the United States trustee’s control over the initial committee formation and composition are now established by statute, the breadth of the bankruptcy court’s ability to review the trustee’s decision are less settled. In particular, recent cases have focused on the bankruptcy court’s ability to order the disbandment of a committee following formation of that committee by the United States trustee. This article analyzes the historical development of these issues before proposing a system of court oversight with deference to the United States’ trustee under the principles applied in administrative agency law.

For the full article or for more information on the Norton Annual Survey of Bankruptcy Law, Volume 2019, visit Thomson Reuters.