Cooperating With The Trustee: Debtors Don't Get a Pass
Most debtors, and debtors' counsel, are extremely cooperative. I have little difficulty with the bankruptcy bar in SE Alabama. But, there is the occasional recalcitrant debtor with an attitude, who just doesn't want to be bothered digging through boxes of records. So, they bring me the boxes and expect me to do the digging. As my wife says quite often, "I don't think so."
In In re Royce Homes, LP. 2009 WL 3052439 (Bkrtcy. S.D.Tex.), the debtor provided trustee access to the storage area where files were located, but did little more. The trustee asked for specific information which debtor declined to provide, and trustee filed a motion to compel.
Judge Bohm cited Section 521(a)(3) which requires debtors to cooperate with the trustee "as necessary to enable the Trustee to perform Trustee's duties." The court also looked to Section 704 and Bankruptcy Rule 4002(a)(4) in support of the requirement that a debtor render affirmative assistance. And finally, the court invoked its broad, inherent powers pursuant to Section 105(a) to fashion remedies it deemed necessary in furtherance of the rights and obligations created under the Bankruptcy Code.
The court then ordered the debtor to provide the specific information sought by the trustee, rather than allowing the debtor so simply grant access to documents and say "here, you find it." The debtor's obligations rise above the basic requirement of providing documents; debtor has an affirmative duty to assist by providing specific information requested.
And again, for Alabama Middle attorneys who might read this blog, I am grateful for the high degree of cooperation which I generally receive from the Bankruptcy Bar. To the debtor with the more casual attitude, however, please understand that with the benefits of bankruptcy (and they are many) comes a fairly high degree of responsibility.
