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condition of the debtor; the operation of the debtor’s business and the desirability of the continuance of
such business; and any other matter relevant to the case or to the formulation of a plan." The examiner
will "file a statement of any investigation, including any fact ascertained pertaining to fraud, dishonesty,
incompetence, misconduct, mismanagement, or irregularity in the management of the affairs of the
debtor, or to a cause of action available to the estate" with the court (11 USC 1106).

Recently, examiners have been given expanded duties by the court, including control over cash receipts
and disbursements. Often, examiners have acted as intermediaries in the formation or presentation of a
plan of reorganization although they are not generally allowed to prepare and file a plan of reorganiza-
tion. They cannot serve as trustee if the court orders the appointment of a trustee. Examiners may retain
accountants to assist in an investigation. Accountants for the examiner provide any accounting or finan-
cial advisory service that the examiner requests. Normally, these services fall into the category of inves-
tigative accounting, cash tracing, and analysis of financial data and transactions. The accountant acts
under the direction and guidance of the examiner. Because certain bankruptcy courts prevent examiners
from hiring professionals under the Bankruptcy Code, the accountant should obtain formal employment
authorization from the bankruptcy court prior to commencing work on behalf of an examiner.

Trustee

In most Chapter 11 cases, a trustee is not appointed. However, at the request of a party of interest, Sec-
tion 1104 of the Bankruptcy Code provides that the court may authorize the appointment of a trustee for
causes including fraud, dishonesty, incompetence, or mismanagement of the affairs of the debtor or if
the court determines that such an appointment is in the best interest of the creditors, any equity security
holders, and other interests of the estate. The U.S. Trustee will appoint a Chapter 11 trustee once the ap-
pointment has been authorized by the court. The duties of a Chapter 11 trustee are detailed in Section
1106 of the Bankruptcy Code.

In a Chapter 7 case, an interim trustee is appointed by the U.S. Trustee to liquidate the business. At the
first meeting of creditors in a Chapter 7 case, the creditors have the right to elect a trustee to replace the
interim trustee appointed by the U.S. Trustee. Section 323(a) of the Bankruptcy Code provides that the
trustee is the representative of the estate. The trustee must protect and maximize the assets of the estate
and represents all creditors and equity holders in the estate.

An accountant for the trustee can perform a variety of tasks and analyses. An accountant for a Chapter 7
trustee may perform investigatory accounting services, tax services, and any other financial analyses re-
quired to settle the estate. An accountant for a Chapter 11 trustee often performs many of the accounting
services formerly performed by debtor management such as the preparation of financial statements and
tax returns, assistance with the plan of reorganization, and preparation of the numerous financial sched-
ules and reports required by the Office of the U.S. Trustee. This accountant may also perform preference
analyses, liquidation analyses, financial projections, and other analyses required for the disclosure
statement. An accountant may also be appointed as a trustee. Trustees are paid fees based on all funds
disbursed or turned over by the trustees to parties in interest (excluding the debtor but including holders
of secured claims).

Office of the United States Trustee

The Office of the United States Trustee was formally established in 1987 in 21 regions involving all
federal districts except those in the states of Alabama and North Carolina. Before the appointment of a
U.S. Trustee in each of the regions, the clerk of the bankruptcy court had similar duties. The clerk was
supervised by the bankruptcy judge and, at least in the eyes of many, a conflict had arisen, because a

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