WASHINGTON, D.C. --Effective June 1, a new voluntary
mediation process will be available to resolve budget disputes
between United States Trustees and Chapter 13 standing trustees.
The process uses "co-mediation"-mediation by two-member
panels consisting of a United States Trustee and a Chapter
13 trustee-- to arrive at a neutral resolution of the dispute.
Prospective panel members will receive co-mediation training
May 29-30 from CDR Associates of Boulder, Colo.
"Voluntary informal dispute resolution provides a
`win-win' solution for United States Trustees and Chapter
13 trustees," according to Linda Stanley, United States
Trustee for Northern California and Nevada, who helped develop
the mediation process. "In addition, training together
will help the United States Trustees and the standing trustees
work together and see the others' way of perceiving issues
and addressing problems."
The Bankruptcy Code permits a Chapter 13 trustee to take
a certain percentage of debtors' payments in order to pay
trustee compensation and actual and necessary expenses.
United States Trustees review the budgets submitted by Chapter
13 trustees to determine what is actual and necessary for
the Chapter 13 operation. In the course of this review,
a United States Trustee may question items such as office
space leasing costs, salary increases for the trustees'
employees, or large computer purchases.
The administrative review procedure that took effect by
rule Nov. 3, 1997, does not address budget disputes. It
applies only to a United States Trustee's decision to suspend
or terminate case assignments to a Chapter 7 or Chapter
13 trustee.
Working together, the United States Trustee Program and
the National Association for Chapter Thirteen Trustees developed
the informal dispute resolution process to provide a quick
and low- cost method for resolving budget disputes. The
process is intended to be used before the commencement of
legal or formal administrative proceedings. It is optional
and non-binding for both the United States Trustee and the
Chapter 13 standing trustee.
According to the process developed by the Program and
the NACTT, upon the request of either the United States
Trustee or the Chapter 13 trustee a two-member panel will
be named, consisting of one United States Trustee and one
Chapter 13 trustee from outside the relevant region. (Alternatively,
the parties may opt for a one-member panel.)
The Chapter 13 trustee panel member will be selected by
the Program's Assistant Director for Review and Oversight
from among three trustees named by the disputing Chapter
13 trustee. The United States Trustee panel member will
be selected by the NACTT's Chair of the Informal Budget
Dispute Resolution Process Committee from among three United
States Trustees named by the disputing United States Trustee.
All prospective panel members must be selected from the
roster of qualified Chapter 13 trustees and United States
Trustees who have received mediation training and have agreed
to serve as mediators.
The panel members and the parties will schedule a dispute
resolution conference, which may take place via telephone
conference or in-person meeting. After the conference, the
panel members will have 30 days to attempt to mediate the
dispute, unless both parties agree to an extension.
If the parties resolve the dispute, the panel will help
them write a description of the resolution. The written
resolution will be included in the United States Trustee's
proposed budget submission to the Director of the Executive
Office for United States Trustees. This budget submission
will conclude the dispute resolution process.
If the parties cannot resolve the dispute, the panel may
issue a non-binding joint written recommendation, which
the parties may accept, reject, or use as the basis for
further negotiation between themselves. In this case, the
issuance of the panel recommendation will conclude the dispute
resolution process.
Informal dispute resolution expenses that are approved
by the panel-such as telephone or travel costs--will be
paid by the Chapter 13 trustee from the trustee's expense
funds, subject to the United States Trustee's approval as
reasonable and necessary.
Contact: Public Information Officer