U.S. Department of Justice United States Trustee Program Annual Report, FY 2012 U.S. Trustee Program Annual Report of Significant Accomplishments for Fiscal Year 2012 United States Trustee Program Annual Report, FY 2012 Table of Contents Message from the Director ............................................................................................................4 Chapter 1. Mission, Organization, and Administration Mission .....................................................................................................................6 Organization and Administration .............................................................................6 Chapter 2. Bankruptcy Code and Bankruptcy Filings Bankruptcy Code ...................................................................................................12 Bankruptcy Filings .................................................................................................12 Chapter 3. Civil Enforcement National Mortgage Settlement and Other Creditor Abuse Enforcement ...............14 Additional Consumer Protection Activities ...........................................................15 Violations by Bankruptcy Petition Preparers .............................................16 Trends–Pro Se Filings and Actions against Bankruptcy Petition .............18 Preparers Improper Conduct by Attorneys ................................................................18 Debtor Identification Issues .......................................................................20 Trends–Total Financial Impact of USTP Actions and Inquiries ...............21 Enforcement Against Abusive Conduct by Debtors ..............................................21 Denial of Debtor’s Discharge ....................................................................22 Dismissal of Case for Abuse ......................................................................23 Debtor Audits .............................................................................................24 Chapter 4. Criminal Enforcement Pursuing Bankruptcy-Related Crimes....................................................................25 Criminal Referrals ..................................................................................................25 USTP Participation in Cases ..................................................................................26 Chapter 5. Litigation in Chapter 11 Reorganizations Chapter 11 Priorities ..............................................................................................28 Professional Fees .......................................................................................28 Trustees, Examiners, and Chief Restructuring Officers ............................31 Executive Bonuses–KERPs and KEIPs .....................................................32 Other Chapter 11 Enforcement ..............................................................................33 Motions to Convert or Dismiss ..................................................................33 Objections to Disclosure Statements and to Plan Confirmation ................33 United States Trustee Program 1 FY 2012 Annual Report Table of Contents Chapter 6. Appellate Activities Bankruptcy-Related Appeals .................................................................................35 U.S. Supreme Court Cases .....................................................................................35 Other Appellate Rulings ........................................................................................36 Abusive Conduct by Debtors ....................................................................36 Chapter 11 Reorganizations .......................................................................36 Private Trustee Compensation ...................................................................37 Chapter 7. Trustee Oversight Private Trustees ......................................................................................................38 Distributions by Trustees .......................................................................................38 Trends–Disbursements in Chapter 13 Cases..........................................................41 Language Assistance Plan .....................................................................................41 Supervision of Case Administration .....................................................................43 Supervision of Financial Operations ......................................................................44 Chapter 8. Credit Counseling and Debtor Education Approval of Providers ............................................................................................45 Fees and Delivery of Services ...............................................................................45 Quality of Services .................................................................................................46 Federal Rulemaking ...............................................................................................46 List of Tables and Figures Twenty-Five Years of USTP Accomplishments..............................................................................6 U.S. Trustee Program Map of Regions and Offices ......................................................................10 U.S. Trustee Program Nationwide Office Locator ........................................................................11 Table 2.1 Bankruptcy Filings by Chapter, FY 2012 ..............................................................13 Figure 2.1 Total Bankruptcy Filings in USTP Districts, FY 2002-2012 ................................13 Table 3.1 Abusive Conduct by Mortgage Servicers and Other Creditors .............................15 Table 3.2 Consumer Protection Activity................................................................................16 Table 3.3 Bankruptcy Petition Preparers under § 110 ...........................................................17 Figure 3.1 Trends–Pro Se Filings and USTP Actions against BPPs, FY 2007-2012 .............18 Table 3.4 Attorney Fee Disgorgements under § 329 .............................................................19 Table 3.5 Other Attorney Misconduct ...................................................................................19 Table 3.6 Debtor Identification ..............................................................................................20 Figure 3.2 Trends–Total Financial Impact of USTP Civil Enforcement Actions and ........... 21 Inquiries, FY 2006-2012 Table 3.7 Denial or Revocation of Discharge under § 727 ....................................................22 Table 3.8 Dismissal for Abuse under § 707(b) ......................................................................23 Table 5.1 Employment of Professionals under §§ 327 and 1103 ..........................................29 Table 5.2 Professional Fee Requests under § 330 .................................................................30 United States Trustee Program 2 FY 2012 Annual Report Table 5.3 Motions to Appoint Trustee or Examiner under § 1104 ........................................31 Table 5.4 Key Employee Retention Plans under § 503(c) .....................................................32 Table 5.5 Case Conversion or Dismissal under § 1112 .........................................................33 Table 5.6 Disclosure Statements under § 1125 ......................................................................34 Table 5.7 Plan Confirmations under § 1129 ..........................................................................34 Figure 7.1 Total Disbursements in Chapter 7 and 13 Cases, FY 2002-2012...........................39 Figure 7.2 Chapter 7 Asset Cases Closed, FY 2002-2012 ......................................................39 Figure 7.3 Total Disbursements in Chapter 7 Cases, FY 2002-2012 ......................................40 Figure 7.4 Total Disbursements in Chapter 13 Cases, FY 2002-2012 ....................................40 Figure 7.5 Trends–Disbursements in Chapter 13 Cases, FY 2006-2012 .................................41 Figure 7.6 Telephone Interpreter Usage by Language, FY 2012 ............................................42 Figure 7.7 Telephone Interpreter Usage by City, FY 2012 .....................................................43 Table 8.1 Approved Providers at Year-End ...........................................................................45 Table 8.2 Median Fee for Services, of Providers Who Charge a Fee ....................................45 Table 8.3 Delivery Method for Services Received ................................................................46 United States Trustee Program 3 FY 2012 Annual Report Message from the Director From protecting homeowners in bankruptcy to enforcing the Bankruptcy Code’s restrictions on attorneys’ fees in large chapter 11 cases, the major accomplishments of the U.S. Trustee Program (USTP or Program) in FY 2012 demonstrate the full scope of our mission to promote the integrity and efficiency of the bankruptcy system for the benefit of all stakeholders– debtors, creditors, and the public. The fact that the interests of many parties may be implicated in a single bankruptcy case is one reason why Congress created the USTP as a neutral party to protect all interests in a case, including the public interest. The Program’s ability to act independently is at the core of its existence and justifies its unique role in the bankruptcy system. The USTP’s