Examiners: When 'Shall' May Be A Matter Of Discretion

Law360, New York (June 1, 2010, 1:08 PM EDT) -- A basic premise of the Bankruptcy Code is that the existing management of a company that voluntarily files for Chapter 11 relief remains in possession throughout the reorganization proceeding unless a bankruptcy court finds the existence of extraordinary circumstances warranting the appointment of a trustee. The appointment of a trustee terminates both the debtor’s status as a debtor-in-possession and the debtor’s exclusive periods to file and solicit acceptances of a plan of reorganization.

Cases involving less than extraordinary circumstances may result in a bankruptcy court appointing...
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