Interim trustee Law and Legal Definition
Interim trustee is a term of art in section 701 of the Bankruptcy Code, Title 11 of the United States Code. Interim trustee refers to a person or entity appointed by the United States Trustee to perform trustee duties in a particular bankruptcy case. Upon the commencement of a case under Chapter 7 of the code, the U.S. Trustee appoints an interim trustee for that case. Under Chapter 7 of the bankruptcy code, trustees are selected by the U.S. Trustee from a "panel" of individuals residing or having offices in the judicial district where the bankruptcy case is filed. If none of the members of such panel is willing to serve as interim trustee in the case, then the United States trustee may serve as interim trustee in the case. 11 USCS § 701 (a) (2).
The trustee duties include conducting a meeting ofcreditors and marshalling assets of the estate. The most important immediate duty of the interim trustee is to conduct the first meeting of creditors referred as a "341 meeting". The bankrupt person is required to appear in this meeting and respond to questions under oath concerning the person's assets and debts. 11 U.S.C. § 341. The trustee is not required to be licensed as an attorney under the Federal law. However, most panel trustees are attorneys, because trustees must be knowledgeable about bankruptcy law and procedure in order to administer their cases. The only legal pre-requisite to qualify as the interim trustee is giving a surety bond to secure compliance with the trustee's responsibilities. Generally, the panel trustees file a "blanket bond" with the U.S. Trustee's office covering all cases in which a particular trustee is serving.
The service of an interim trustee terminates when a trustee elected or designated under section 702 of this title [11 USCS § 702] to serve as trustee in the case qualifies under section 322 of this title [11 USCS § 322]. 11 USCS § 701 (b). An interim trustee is a trustee in a case under the title [11 USCS §§ 101 et seq.]. 11 USCS § 701 (c). The interim trustee becomes the "permanent" trustee if the creditors do not elect some other person qualified to serve as trustee for the case. The trustee is subject to removal for good cause. Generally, the interim trustee is not replaced and serves for the entire case.