11 U.S.C. § 702 — Election of trustee
submitted 48 years ago by Pub. L. 95-598 to r/title-11-BANKRUPTCY · 259 words · no verdicts yet
This section identifies which creditors may vote for a bankruptcy trustee and sets the voting thresholds for requesting and electing one. If no trustee is elected under these rules, the interim trustee serves as trustee.
(a) A creditor* may vote for a trustee candidate only if the creditor: (1) holds an allowable, undisputed, fixed, liquidated, unsecured claim* of a type entitled to distribution under section 726(a)(2), (3), or (4), 752(a), 766(h), or 766(i); (2) has no materially adverse interest to creditors entitled to that distribution, except for an equity interest that is not substantial compared with the creditor’s creditor interest; and (3) is not an insider.
(b) At the creditors’ meeting under section 341, creditors may elect one trustee if creditors who may vote under subsection (a) request an election and hold at least 20 percent in amount of the subsection (a)(1) claims held by creditors who may vote.
(c) A candidate is elected if: (1) creditors holding at least 20 percent in amount of the qualifying claims held by voting creditors vote; and (2) the candidate receives votes from creditors holding a majority in amount of the qualifying claims held by creditors who vote for a trustee.
(d) If no trustee is elected under this section, the interim trustee serves as trustee in the case.
A creditor* may vote for a candidate for trustee only if such creditor—
holds an allowable, undisputed, fixed, liquidated, unsecured claim* of a kind entitled to distribution under section 726(a)(2), 726(a)(3), 726(a)(4), 752(a), 766(h), or 766(i) of this title;
does not have an interest materially adverse, other than an equity interest that is not substantial in relation to such creditor’s interest as a creditor, to the interest of creditors entitled to such distribution; and
is not an insider.
At the meeting of creditors held under section 341 of this title, creditors may elect one person to serve as trustee in the case if election of a trustee is requested by creditors that may vote under subsection (a) of this section, and that hold at least 20 percent in amount of the claims specified in subsection (a)(1) of this section that are held by creditors that may vote under subsection (a) of this section.
A candidate for trustee is elected trustee if—
creditors holding at least 20 percent in amount of the claims of a kind specified in subsection (a)(1) of this section that are held by creditors that may vote under subsection (a) of this section vote; and
such candidate receives the votes of creditors holding a majority in amount of claims specified in subsection (a)(1) of this section that are held by creditors that vote for a trustee.
If a trustee is not elected under this section, then the interim trustee shall serve as trustee in the case.
Source credit: (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2604; Pub. L. 97–222, § 7, July 27, 1982, 96 Stat. 237; Pub. L. 98–353, title III, § 472, July 10, 1984, 98 Stat. 380.)
- 1978Enacted · Pub. L. 95-598 · 92 Stat. 2604
- 1982Amended · Pub. L. 97-222 · 96 Stat. 237
- 1984Amended · Pub. L. 98-353 · 98 Stat. 380
A history note hasn’t been published yet. The record shows enactment by Pub. L. 95-598 on 1978-11-06.
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