Common use of Election of trustee Clause in Contracts

Election of trustee. (a) A creditor may vote for a candidate for trustee only if such creditor— (1) holds an allowable, undisputed, fixed, liq- uidated, unsecured claim of a kind entitled to distribution under section 726(a)(2), 726(a)(3), 726(a)(4), 752(a), 766(h), or 766(i) of this title; (2) does not have an interest materially ad- verse, other than an equity interest that is not substantial in relation to such creditor’s in- terest as a creditor, to the interest of creditors entitled to such distribution; and (3) is not an insider. (b) At the meeting of creditors held under sec- tion 341 of this title, creditors may elect one person to serve as trustee in the case if election of a trustee is requested by creditors that may vote under subsection (a) of this section, and that hold at least 20 percent in amount of the claims specified in subsection (a)(1) of this sec- tion that are held by creditors that may vote under subsection (a) of this section. (c) A candidate for trustee is elected trustee if— (1) creditors holding at least 20 percent in amount of the claims of a kind specified in subsection (a)(1) of this section that are held by creditors that may vote under subsection (a) of this section vote; and (2) such candidate receives the votes of creditors holding a majority in amount of claims specified in subsection (a)(1) of this sec- tion that are held by creditors that vote for a trustee. (d) If a trustee is not elected under this sec- tion, then the interim trustee shall serve as trustee in the case. (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2604; Pub. L. 97–222, § 7, July 27, 1982, 96 Stat. 237; Pub. L. 98–353, title III, § 472, July 10, 1984, 98 Stat. 380.) The House amendment adopts section 702(a)(2) of the Senate amendment. An insubstantial equity interest does not disqualify a creditor from voting for a can- didate for trustee. SENATE REPORT NO. 95–989 Subsection (a) of this section specifies which credi- tors may vote for a trustee. Only a creditor that holds an allowable, undisputed, fixed, liquidated, unsecured claim that is not entitled to priority, that does not have an interest materially adverse to the interest of general unsecured creditors, and that is not an insider may vote for a trustee. The phrase ‘‘materially ad- verse’’ is currently used in the Rules of Bankruptcy Procedure, rule 207(d). The application of the standard requires a balancing of various factors, such as the na- ture of the adversity. A creditor with a very small eq- uity position would not be excluded from voting solely because he holds a small equity in the debtor. The Rules of Bankruptcy Procedure also currently provide for temporary allowance of claims, and will continue to do so for the purposes of determining who is eligible to vote under this provision.

Election of trustee. (a) A creditor may vote for a candidate for trustee only if such creditor— (1) holds an allowable, undisputed, fixed, liq- uidated, unsecured claim of a kind entitled to distribution under section 726(a)(2), 726(a)(3), 726(a)(4), 752(a), 766(h), or 766(i) of this title; (2) does not have an interest materially ad- verse, other than an equity interest that is not substantial in relation to such creditor’s in- terest as a creditor, to the interest of creditors entitled to such distribution; and (3) is not an insider. (b) At the meeting of creditors held under sec- tion 341 of this title, creditors may elect one person to serve as trustee in the case if election of a trustee is requested by creditors that may vote under subsection (a) of this section, and that hold at least 20 percent in amount of the claims specified in subsection (a)(1) of this sec- tion that are held by creditors that may vote under subsection (a) of this section. (c) A candidate for trustee is elected trustee if— (1) creditors holding at least 20 percent in amount of the claims of a kind specified in subsection (a)(1) of this section that are held by creditors that may vote under subsection (a) of this section vote; and (2) such candidate receives the votes of creditors holding a majority in amount of claims specified in subsection (a)(1) of this sec- tion that are held by creditors that vote for a trustee. (d) If a trustee is not elected under this sec- tion, then the interim trustee shall serve as trustee in the case. (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2604; Pub. L. 97–222, § 7, July 27, 1982, 96 Stat. 237; Pub. L. 98–353, title III, § 472, July 10, 1984, 98 Stat. 380.) The House amendment adopts section 702(a)(2) of the Senate amendment. An insubstantial equity interest does not disqualify a creditor from voting for a can- didate for trustee. SENATE REPORT NO. 95–989 Subsection (a) of this section specifies which credi- tors may vote for a trustee. Only a creditor that holds an allowable, undisputed, fixed, liquidated, unsecured claim that is not entitled to priority, that does not have an interest materially adverse to the interest of general unsecured creditors, and that is not an insider may vote for a trustee. The phrase ‘‘materially ad- verse’’ is currently used in the Rules of Bankruptcy Procedure, rule 207(d). The application of the standard requires a balancing of various factors, such as the na- ture of the adversity. A creditor with a very small eq- uity position would not be excluded from voting solely because he holds a small equity in the debtor. The Rules of Bankruptcy Procedure also currently provide for temporary allowance of claims, and will continue to do so for the purposes of determining who is eligible to vote under this provision.

Election of trustee. (a) A creditor may vote for a candidate for trustee only if such creditor— (1) holds an allowable, undisputed, fixed, liq- uidated, unsecured claim of a kind entitled to distribution under section 726(a)(2), 726(a)(3), 726(a)(4), 752(a), 766(h), or 766(i) of this title; (2) does not have an interest materially ad- verse, other than an equity interest that is not substantial in relation to such creditor’s in- terest as a creditor, to the interest of creditors entitled to such distribution; and (3) is not an insider. (b) At the meeting of creditors held under sec- tion 341 of this title, creditors may elect one person to serve as trustee in the case if election of a trustee is requested by creditors that may vote under subsection (a) of this section, and that hold at least 20 percent in amount of the claims specified in subsection (a)(1) of this sec- tion that are held by creditors that may vote under subsection (a) of this section. (c) A candidate for trustee is elected trustee if— (1) creditors holding at least 20 percent in amount of the claims of a kind specified in subsection (a)(1) of this section that are held by creditors that may vote under subsection (a) of this section vote; and (2) such candidate receives the votes of creditors holding a majority in amount of claims specified in subsection (a)(1) of this sec- tion that are held by creditors that vote for a trustee. (d) If a trustee is not elected under this sec- tion, then the interim trustee shall serve as trustee in the case. (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2604; Pub. L. 97–222, § 7, July 27, 1982, 96 Stat. 237; Pub. L. 98–353, title III, § 472, July 10, 1984, 98 Stat. 380.) The House amendment adopts section 702(a)(2) of the Senate amendment. An insubstantial equity interest HISTORICAL AND REVISION NOTES LEGISLATIVE STATEMENTS does not disqualify a creditor from voting for a can- didate for trustee. SENATE REPORT NO. 95–989 Subsection (a) of this section specifies which credi- tors may vote for a trustee. Only a creditor that holds an allowable, undisputed, fixed, liquidated, unsecured claim that is not entitled to priority, that does not have an interest materially adverse to the interest of general unsecured creditors, and that is not an insider may vote for a trustee. The phrase ‘‘materially ad- verse’’ is currently used in the Rules of Bankruptcy Procedure, rule 207(d). The application of the standard requires a balancing of various factors, such as the na- ture of the adversity. A creditor with a very small eq- uity position would not be excluded from voting solely because he holds a small equity in the debtor. The Rules of Bankruptcy Procedure also currently provide for temporary allowance of claims, and will continue to do so for the purposes of determining who is eligible to vote under this provision.

Election of trustee. (a) A creditor may vote for a candidate for trustee only if such creditor— (1) holds an allowable, undisputed, fixed, liq- uidated, unsecured claim of a kind entitled to distribution under section 726(a)(2), 726(a)(3), 726(a)(4), 752(a), 766(h), or 766(i) of this title; (2) does not have an interest materially ad- verse, other than an equity interest that is not substantial in relation to such creditor’s in- terest as a creditor, to the interest of creditors entitled to such distribution; and (3) is not an insider. (b) At the meeting of creditors held under sec- tion 341 of this title, creditors may elect one person to serve as trustee in the case if election of a trustee is requested by creditors that may vote under subsection (a) of this section, and that hold at least 20 percent in amount of the claims specified in subsection (a)(1) of this sec- tion that are held by creditors that may vote under subsection (a) of this section. (c) A candidate for trustee is elected trustee if— (1) creditors holding at least 20 percent in amount of the claims of a kind specified in subsection (a)(1) of this section that are held by creditors that may vote under subsection (a) of this section vote; and (2) such candidate receives the votes of creditors holding a majority in amount of claims specified in subsection (a)(1) of this sec- tion that are held by creditors that vote for a trustee. (d) If a trustee is not elected under this sec- tion, then the interim trustee shall serve as trustee in the case. (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2604; Pub. L. 97–222, § 7, July 27, 1982, 96 Stat. 237; Pub. L. 98–353, title III, § 472, July 10, 1984, 98 Stat. 380.) The House amendment adopts section 702(a)(2) of the Senate amendment. An insubstantial equity interest does not disqualify a creditor from voting for a can- didate for trustee. SENATE REPORT NO. 95–989 Subsection (a) of this section specifies which credi- tors may vote for a trustee. Only a creditor that holds an allowable, undisputed, fixed, liquidated, unsecured claim that is not entitled to priority, that does not have an interest materially adverse to the interest of general unsecured creditors, and that is not an insider may vote for a trustee. The phrase ‘‘materially ad- verse’’ is currently used in the Rules of Bankruptcy Procedure, rule 207(d). The application of the standard requires a balancing of various factors, such as the na- ture of the adversity. A creditor with a very small eq- uity position would not be excluded from voting solely because he holds a small equity in the debtor. The Rules of Bankruptcy Procedure also currently provide for temporary allowance of claims, and will continue to do so for the purposes of determining who is eligible to vote under this provision.