Bankruptcy Examiner by yre19594

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									                                      Bankruptcy Examiner

A bankruptcy examiner is a court-appointed impartial investigator in a chapter 11 reorganization
case, typically a large case. The bankruptcy court decides whether the appoint an examiner or
trustee. The Office of the United States Trustee, a division of the U.S. Department of Justice,
selects the person to serve as examiner.

The appointment of a trustee terminates the debtor in possession's exclusive right to propose a
reorganization plan; the appointment of an examiner does not terminate exclusivity. The trustee
ousts the debtor's management (although a trustee may choose to keep some managers in place);
the examiner does not oust management and generally performs only investigative tasks. The
examiner cannot serve as a trustee, and the examiner's only responsibility is generally to conduct an
impartial investigation and make a report of that investigation. Creditors generally are entitled to
appointment of an examiner in any case where the debtor's fixed, liquidated debts, unsecured debts
(other than debts for goods, services or taxes, or owing to an insider) exceed $5 million. The
bankruptcy court also has discretion to order the appointment of an examiner in the interests of
creditors or other parties in interest. Appointment of an examiner may avoid the expense and
disruption caused by a trustee.

Before starting Gumport | Reitman, Leonard L. Gumport served as the court-appointed examiner in
the chapter 11 bankruptcy of a United States affiliate of international arms dealer Adnan
Khashoggi. The bankruptcy case was entitled In re Newdge, Chapter 11 Case No. LA 87-01467
NCA (Bankr. C.D. Cal.) Following the completion of that case, Mr. Gumport served as trustee,
examiner, and counsel to trustee in other cases and wrote an article about the history, procedures,
and rules governing bankruptcy examiners. The article is entitled The Bankruptcy Examiner, 20
Cal. Bankr. J. 71 (1992) and can be found at:
http://www.grlegal.com/Articles/The_Bankruptcy_Examiner.pdf

The article has been cited in judicial decisions and other publications (see, e.g., George B. Cauthen
and Jody A. Bedenbaugh, The New World of Examiners, at:
http://www.nelsonmullins.com/news/nelson-mullins-articles-speeches-detail.cfm
and Andrew Silfen and Leah Eisenberg, The Appointment of Examiners in Chapter 11 Proceedings
-- Legal Issues, at http://www.arentfox.com/publications/index.cfm

								
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