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Several recent United States Bankruptcy Court rulings have come down regarding section 1104(c) of the Bankruptcy Code, which deals with the appointment of an examiner. This article discusses recent cases in which the judges departed from the majority view that the appointment of an examiner is mandatory when the $5 million threshold of 11 U.S.C. § 1104(c)(2) is satisfied and refused to order appointment even though the threshold was met. The article addresses the effects of the ongoing controversy surrounding wording of the statute with regard to the scope of a judge’s discretion in such cases, making the case that the time has come to amend the Bankruptcy Code in order to provide a clear statutory basis to enable courts to exercise their discretion not to appoint an examiner when one is not warranted.
Vadim J. Rubinstein is an attorney in our Bankruptcy, Restructuring and Creditors' Rights Group and is based in the New York office of Loeb & Loeb LLP.
This article was originally published by Bloomberg Finance L.P in the Vol. 4, No. 39 edition of the Bloomberg Law Reports - Bankruptcy Law. Permission for article reprint has been granted.