COMPENSATION AND TRUSTEE REIMBURSEMENT PROCEDURES

IN CHAPTER 7 ASSET CASES (a) No Order Required: Payment of Expenses, Up to $1,000, that are Inherent in the Appointment of a Chapter 7 Trustee . During the course of a chapter 7 case, a trustee may disburse up to $1,000 from estate funds to pay the following actual and necessary expenses of the estate without further authorization from the court (the “Authorized Allocation”): (1) Actual cost of noticing, postage, copying; (2) Computer charges; (3) Long distance telephone; (4) Postage; (5) Moving or storage of estate assets; (6) Teletransmission; (7) Travel charges for trustee (includes lodging, meals, mileage and parking); (8) Bank charges for research or copies; (9) Court reporting fees; (10) Delivery of documents; (11) Expedited mail; (12) Filing and process serving; (13) Notary fees; (14) Recording fees; (15) Deposition/transcript fees; 29 LBR 2016-2 (16) Witness fees; (17) Locate and move assets; (18) Prepare litigation support documents; (19) Locksmith; (20) Security services; and (21) Utilities. (b) Order Required: Payment of Expenses, Up to $5,000, After Limited Notice and Opportunity to Request a Hearing. If a trustee determines that it is necessary or appropriate to pay actual and necessary administrative expenses of the estate using estate funds, and such expenses do not exceed $5,000, the trustee must file a notice of F 2016- the 2.3.NOTICE.TRUSTEE.DISBURSE.

After the waiting period set forth below, if there is no opposition or request for a hearing, the trustee must lodge a proposed order authorizing such payment pursuant to LBR 9013-1(o)(3). The trustee is not required to serve the notice on any party or the court, other than the debtor and counsel for the debtor. obligations trustee’s intent using form such pay to Any party that objects to the payment of the administrative expenses as set forth in the trustee’s notice must file a response and request for hearing within 14 days after the date of filing of the notice, and serve the response on the trustee and the trustee’s counsel, if any. Upon receipt of a response and request for hearing, the trustee must follow the procedures set forth in LBR 9013-1(o)(4) to set the matter for hearing. Pursuant to the procedure set forth above, a trustee may disburse up to $5,000 from estate funds to pay the following actual and necessary administrative expenses of the estate (the “Administrative Allocation”): Insurance; (1) Costs to advertise sale; (2) (3) Rent; (4) Obligations to taxing agencies arising under 11 U.S.C. § 507(a)(2), provided the estate is and is likely to remain administratively solvent; and (5) Obligations to taxing agencies arising under 11 U.S.C. § 503(b)(1)(B), but not preconversion tax obligations.

No Order Required: Bond Premiums. In addition to payments that may be made from the Authorized Allocation and/or the Administrative Allocation, the trustee may pay bond premiums required by 11 U.S.C. § 322(a) during the ordinary course of the trustee’s administration of an estate. Expenses for Preparation of Tax Returns. The trustee may, by a single application, seek authorization to employ and pay a tax preparer a flat fee (not to exceed $1,000 unless the court orders otherwise) for preparation of tax returns for the estate.

If the court grants such application, the trustee may pay the flat fee so ordered without further application or order. This amount is in addition to payments that may be made from the Authorized Allocation and/or the Administrative Allocation. (c) (d) 30 LBR 2016-2 (e) Emergency Expenses. The trustee may exceed the Authorized Allocation and/or the Administrative Allocation to pay emergency expenses, without prior court approval, to protect assets of the estate that might otherwise be lost or destroyed.

Emergency expenses are limited to: (1) Charges for storage of the debtor’s records to prevent the destruction of those records and related necessary cartage costs; Insurance premiums to prevent liability to the estate; (2) (3) Locksmith charges to secure the debtor’s real property or business; and (4) Security services to safeguard the debtor’s real or personal property. If the trustee disburses more than the Authorized Allocation and/or the Administrative Allocation to pay emergency expenses and other expenses for which the Authorized Allocation and/or the Administrative Allocation may be used, the trustee must file and serve a cash disbursements motion, as described in subsection (g) of this rule, within 7 days after such expenses are paid. (f) for Employment Procedures of Paraprofessional Fees and Expenses. A trustee must obtain court approval to employ and to pay a paraprofessional. of Paraprofessionals and Payment (1) Definition.

The term “paraprofessional” includes all persons or entities other than “professionals” who perform services at the trustee’s request and seek payment for services and expenses directly from the bankruptcy estate, including an agent, a field representative, an adjuster, and a tax preparer. an employment (2) Employment. A trustee may seek court approval to employ a paraprofessional by filing form application F 2016-2.1.APP.TRUSTEE.EMPLOY. The court’s approval of the employment of any paraprofessional is not a judicial determination as to whether services of the paraprofessional constitute “trustee services.” is a nonexclusive list of services that the court deems “trustee services” subject to the limitation on compensation contained in 11 U.S.C. § 326(a): The following court-approved using (A) Review schedules; (B) Acceptance and qualification as a trustee; (C) Routine investigation regarding location and status of assets; (D) Initial contact with lessors, secured creditors, assignee for benefit creditors, etc., if same can be accomplished from office; (E) Turnover or inspection of documents, such as bank documents; (F) UCC search review; (G) Recruit and contract appraisers, brokers, and professionals; (H) Mail forwarding notices; (I) (J) (K) (L) (M) Routine motions to dismiss; Routine collection of accounts receivable; Letters regarding compliance with LBR 2016-1; Conduct 11 U.S.C. § 341(a) examinations; Routine objections to exemption; 31 LBR 2016-2 Prepare and file cash disbursements motions and necessary attachments; (N) 11 U.S.C. § 707(b) referral to United States trustee; (O) Routine documentation of notices of sale, abandonment, compromise, etc.; (P) Appear at hearings on routine motions; (Q) Review and execute certificates of sale, deed, or other transfer documents; (R) Prepare and file notifications of asset case; (S) (T) Prepare exhibits to operating reports; (U) Prepare quarterly bond reports; (V) Prepare trustee’s interim reports; (W) Routine claims review and objection; (X) Prepare and file final reports and accounts and related orders; (Y) Prepare motions to abandon or destroy books and records; (Z) Prepare and file FRBP 3011 reports; (AA) Prepare and file notices and motions to abandon assets and related orders; (BB) Attend sales; (CC) Monitor litigation; (DD) Answer routine creditor correspondence and phone calls; (EE) Prepare and file applications to employ paraprofessionals; (FF) Review and comment on professional fee applications; (GG) Participate in audits; (HH) Answer United States trustee questions; (II) Close and open bank accounts; (JJ) Verify proposed disbursements; (KK) Post receipts and disbursements; (LL) Prepare details and calculations for payment of dividend; (MM) Prepare dividend checks; (NN) Organize and research bills; (OO) Prepare checks for the trustee’s signature; (PP) Prepare internal cash summary sheets; (QQ) Reconcile bank accounts; (RR) Prepare and make deposits; and (SS) Additional routine work necessary for administration of the estate. (3) Reimbursement of Fees and Expenses.

A trustee may pay a paraprofessional only upon specific order of the court. (A) If the paraprofessional or trustee contends that the paraprofessional’s services are not “trustee services,” the trustee or paraprofessional must present evidence to support that contention. Absent adequate proof, the court may find that the services of the paraprofessional are “trustee services” subject to the limitation on compensation under 11 U.S.C. § 326(a). (B) If a trustee refuses or neglects to file a fee application for the paraprofessional, the paraprofessional may file a separate fee application pursuant to 11 U.S.C. § 330.

In addition to fulfilling the requirements of 11 U.S.C. § 330, FRBP 2014 and these rules, the paraprofessional’s fee application must include: (i) a declaration explaining why a separate fee application is necessary; and (ii) evidence establishing which services are 32 LBR 2070-1 “trustee services” and which are not. The paraprofessional must serve any separate fee application on the trustee, debtor, debtor’s counsel (if any), the United States trustee, and all professionals and other paraprofessionals employed in the case, and must give notice of the application to all creditors. (g) Cash Disbursements Motion. (1) Filing and Service.

If the trustee wishes to pay expenses not authorized by this rule from estate funds, the trustee must file a cash disbursements motion to obtain court approval of payments for emergency expenses and all other expenses the trustee deems necessary for effective administration of the case. The cash disbursements motion must be in substantially the same form as court-approved form F 2016-2.2.MOTION.TRUSTEE.DISBURSE and may be brought under