The Department of Justice’s U.S. Trustee Program (USTP) announced today the publication of a final rule in the Federal Register that streamlines the financial reports required under the Bankruptcy Code to be filed with the bankruptcy court by the vast majority of business and individual debtors in chapter 11 bankruptcy, including in the largest reorganization cases. The rule, entitled “Procedures for Completing Uniform Periodic Reports in Non-Small Business Cases Filed Under Chapter 11 of Title 11,” replaces approximately 150 existing variations of these reports with two uniform forms to be used nationally: a monthly operating report filed before plan confirmation and, after plan confirmation, a quarterly post-confirmation report to show compliance with the plan. The rule does not apply to debtors who are small businesses or who, in accordance with the CARES Act, have elected relief under subchapter V of chapter 11.
“This new rule is largely deregulatory and greatly simplifies financial reporting for chapter 11 debtors that do not qualify as small businesses while maintaining clarity and transparency for the public,” said USTP Director Cliff White. “This good-government reform, which received extensive public input, strikes an appropriate balance between reporting requirements and transparency.”
The rule is posted at https://www.justice.gov/ust/rules-and-federal-register-notices.
The New Reports Reflect Input from Stakeholders
To solicit feedback from the public, the USTP published the proposed rule for two public comment periods and held a public meeting with interested stakeholders. The feedback from commenters was constructive and wide ranging. The final rule balances the divergent views in accomplishing the goals set by Congress of simplifying the reporting process while providing transparency and improved uniformity across the reports. Although the two new forms simplify the financial information that chapter 11 debtors must provide, additional supplemental information also may be requested by the U.S. Trustee if there is a particularized need.
Implementation and the Effective Date
The rule provides for a 180-day implementation period, so the new forms will become effective and apply to all reports filed on or after June 21, 2021. Implementation will include training by the USTP for members of the bankruptcy community as well as coordination with the courts and other stakeholders. In addition, the USTP will provide, at no cost, PDF fillable versions of the reports on its website and will provide bankruptcy software vendors with the underlying technical specifications for the reports so they will have the ability to offer software to report filers in the future.
To facilitate outreach on the new requirements, the USTP has established a resource page on its website where interested stakeholders can access the rule, the report forms, and all related instructions. The resource page also will be used to keep the public informed of relevant implementation updates.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The Program has 21 regions and 90 field office locations. Learn more about the Program at https://www.justice.gov/ust.