Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986

(Conference report filed in House, H. Rept. 99-958)

Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986 - Title I: Amendments to Title 28 of the United States Code - Subtitle A: Appointment of Bankruptcy Judges - Amends the judicial code to increase the number of bankruptcy judges: (1) from two to three for the Eastern and Western Districts of Arkansas; (2) from seven to nine for the Northern District of California; (3) from four to six for the Eastern District of California; (4) from 12 to 19 for the Central District of California; (5) from three to four for the Southern District of California; (6) from two to four for the Middle District of Florida; (7) from four to six for the Northern District of Georgia; (8) from one to two for the Southern District of Georgia; (9) from one to two for Idaho; (10) from eight to ten for the Northern District of Illinois; (11) from two to three for the Central District of Illinois; (12) from two to three for the Northern District of Indiana; (13) from one to two for the Northern District of Iowa; (14) from one to two for the Southern District of Iowa; (15) from two to three for the Western District of Kentucky; (16) from two to three for the Western District of Louisiana; (17) from two to three for Maryland; (18) from two to three for the Western District of Michigan; (19) from one to two for Nebraska; (20) from two to three for Nevada; (21) from five to seven for New Jersey; (22) from one to two for the Western District of North Carolina; (23) from one to two for the Northern District of Oklahoma; (24) from two to three for the Western District of Oklahoma; (25) from four to five for Oregon; (26) from three to four for the Western District of Pennsylvania; (27) from one to two for South Carolina; (28) from one to two for South Dakota; (29) from two to three for the Eastern District of Tennessee; (30) from two to three for the Western District of Tennessee; (31) from four to five for the Northern District of Texas; (32) from three to six for the Southern District of Texas; (33) from two to three for the Western District of Texas; (34) from two to three for Utah; (35) from three to four for the Eastern District of Virginia; (36) from one to two for the Eastern District of Washington; (37) from four to five for the Western District of Washington; and (38) from three to four for the Eastern District of Wisconsin.

Makes members of the bar of the Commonwealth of Puerto Rico eligible for appointment to bankruptcy judgeships.

Prohibits any bankruptcy clerk of court from consolidating with a district court office without the prior approval of the Judicial Conference and the Congress.

Subtitle B: United States Trustees and Related Matters - Revises and increases (from ten to 21) the groups of judicial districts to which a U.S. trustee is assigned to perform specified duties in bankruptcy cases. Reduces the U.S. trustee term of office from seven years to five years. Removes the 90-day limitation on the appointment of acting U.S. trustees.

Extends the authorities of U.S. trustees to include: (1) monitoring applications for fees and expenses; (2) monitoring reorganization plans and disclosure statements; (3) taking action to insure that all statutorily required reports are filed by debtors; (4) monitoring creditors' committees; (5) notifying and assisting the U.S. attorney if violations of criminal laws are discovered; and (6) monitoring applications filed to employ professional persons. Allows U.S. trustees to file comment with the court on such matters.

Increases the salaries of U.S. trustees from GS-16 to level IV of the Executive Schedule.

Establishes in the Treasury the United States Trustee System Fund for the operations of the trustees, including salaries and related benefits. Provides for the deposit of specified bankruptcy fees in the Fund. Requires the Attorney General to report to the Congress on the deposits and expenditures of such Fund not later than 120 days after the end of each fiscal year. Authorizes appropriations as necessary to supplement deposited amounts.

Repeals the authority of the Director of the Administrative Office of the United States Courts to name members to the panel of private trustees.

Increases the filing fee for the commencement of bankruptcy actions.

Subtitle C: Miscellaneous Amendments and Technical Corrections to Title 28 - Authorizes Federal district court to be held in Lawrence, Kansas.

Title II: Amendments to Title 11 of the United States Code - Subtitle A: Activities of United States Trustees - Authorizes the bankruptcy court in involuntary liquidation cases to order the U.S. trustee to appoint an interim trustee (currently, the court makes such an appointment).

Declares that a U.S. trustee for the judicial district in which a case is pending is eligible to serve as trustee in such case.

Authorizes the U.S. trustee (in lieu of the court) to determine appropriate bond amounts for a person chosen to serve as trustee for certain proceedings.

Prohibits the court from removing a U.S. trustee. Empowers the U.S. trustee to remove a trustee for cause.

Prohibits compensation for services or reimbursement of expenses of U.S. trustees or standing trustees in individual bankruptcy cases. Requires, in cases where the U.S. trustee is due compensation, that such amount be paid into the United States Trustee System Fund.

Transfers, in liquidation cases, the following authorities from the court to U.S. trustees: (1) authority to convene and preside at meetings of creditors and equity security holders; (2) authority to appoint interim trustees; and (3) authority to appoint successor trustees.

Requires trustees in liquidation cases to file a final account of the administration of the estate with the court and the U.S. trustee. (Currently, trustees are required to file such an account with the court.)

Authorizes creditors' committees to consult with the U.S. trustee in connection with estate administration.

Includes U.S. trustees in discharge proceedings.

Transfers, in reorganization cases, the following authorities from the court to U.S. trustees: (1) authority to appoint creditors' and equity security holders' committees; (2) authority to appoint trustees or examiners; and (3) authority to appoint trustees in railroad reorganization cases.

Repeals provisions concerning the U.S. trustee pilot program.

Permits a court to dismiss an individual debt case or to convert such a case to a liquidation or reorganization case at the request of a U.S. trustee. Includes as a cause for dismissal the failure of a debtor to file: (1) information on his or her financial affairs within 15 days or such additional time as the court may allow after the filing of the petition commencing the case; or (2) his or her intentions for property securing consumer debts within the prescribed period.

Subtitle B: Debtors Who Are Family Farmers- Defines a "family farmer" for purposes of Federal bankruptcy law as any person whose aggregate debts do not exceed $1,500,000 and not less than 80 percent of whose debts arise from farming operations. Includes as a "family farmer" a corporation in which at least 50 percent of whose stock is owned by one family and such family conducts the farming operation.

Allows a family farmer with a regular annual income to qualify as a debtor under bankruptcy provisions providing for the adjustment of debts of an individual with regular income.

Establishes separate Federal bankruptcy provisions governing family farm reorganization. Provides for the appointment of a trustee in family farm reorganization cases. Sets forth the powers, duties, and compensation of such trustees.

Permits a debtor to convert a family farm reorganization case to a liquidation case at any time.

Sets forth the requirements of a family farm reorganization plan. Specifies restrictions on plan modification. Sets forth conditions for court confirmation of such plans.

Subtitle C: a Amendments and Technical Corrections to Title 11 - Makes technical changes to title 11 of the U.S.Code.

Title III: Transition and Administrative Provisions - Terminates the term of office of incumbent U.S. trustees: (1) two years after the expiration date of such term; or (2) four years after the effective date of this Act, whichever occurs first. Revises the scope of authority of such trustees and fixes their salaries.

Repeals Chapter 12 (Adjustment of Debts of a Family Farmer with Regular Annual Income) of title 11 of the U.S of Code on October 1, 1993.

Allows the Attorney General and the Administrative Office of the U.S. Courts to agree to the cooperative use of services, equipment, personnel, and facilities.

Expresses the sense of the Congress that any individual currently serving as a trustee in a bankruptcy case or as an estate administrator should be considered for appointment as a U.S. trustee.

Requires the Director of the Executive Office for United States Trustees to establish an electronic case management demonstration project. Requires the General Accounting Office to conduct a study of the effectiveness of such project.