11 U.S.C. § 702
11 U.S.C. § 702
HISTORICAL AND REVISION NOTES
LEGISLATIVE STATEMENTSThe House amendment adopts section 702(a)(2) of the Senate amendment. An insubstantial equity interest does not disqualify a creditor from voting for a candidate for trustee.
SENATE REPORT NO. 95-989Subsection (a) of this section specifies which creditors 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 adverse" 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 nature of the adversity. A creditor with a very small equity 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.Subsection (b) permits creditors at the meeting of creditors to elect one person to serve as trustee in the case. Creditors holding at least 20 percent in amount of the claims specified in the preceding paragraph must request election before creditors may elect a trustee. Subsection (c) specifies that a candidate for trustee is elected trustee if creditors holding at least 20 percent in amount of those claims actually vote, and if the candidate receives a majority in amount of votes actually cast.Subsection (d) specifies that if a trustee is not elected, then the interim trustee becomes the permanent trustee and serves in the case permanently.
EDITORIAL NOTES
AMENDMENTS1984-Subsec. (b). Pub. L. 98-353, §472(a), inserted "held" after "meeting of creditors".Subsec. (c)(1). Pub. L. 98-353, §472(b)(1), inserted "of a kind" after "claims".Subsec. (c)(2). Pub. L. 98-353, §472(b)(2), substituted "for a trustee" for "for trustee".Subsec. (d). Pub. L. 98-353, §472(c), substituted "this section" for "subsection (c) of this section". 1982-Subsec. (a)(1). Pub. L. 97-222 substituted "726(a)(4), 752(a), 766(h), or 766(i)" for "or 726(a)(4)".
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98-353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353 set out as a note under section 101 of this title.
- claim
- The term "claim" means-(A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or(B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured.
- debtor
- The term "debtor" means person or municipality concerning which a case under this title has been commenced.(13A) The term "debtor's principal residence"-(A) means a residential structure if used as the principal residence by the debtor, including incidental property, without regard to whether that structure is attached to real property; and(B) includes an individual condominium or cooperative unit, a mobile or manufactured home, or trailer if used as the principal residence by the debtor.
- insider
- The term "insider" includes-(A) if the debtor is an individual-(i) relative of the debtor or of a general partner of the debtor;(ii) partnership in which the debtor is a general partner;(iii) general partner of the debtor; or(iv) corporation of which the debtor is a director, officer, or person in control;(B) if the debtor is a corporation-(i) director of the debtor;(ii) officer of the debtor;(iii) person in control of the debtor;(iv) partnership in which the debtor is a general partner;(v) general partner of the debtor; or(vi) relative of a general partner, director, officer, or person in control of the debtor;(C) if the debtor is a partnership-(i) general partner in the debtor;(ii) relative of a general partner in, general partner of, or person in control of the debtor;(iii) partnership in which the debtor is a general partner;(iv) general partner of the debtor; or(v) person in control of the debtor;(D) if the debtor is a municipality, elected official of the debtor or relative of an elected official of the debtor;(E) affiliate, or insider of an affiliate as if such affiliate were the debtor; and(F) managing agent of the debtor.