In fiscal year 08-09, there were 132 Chapter 11 filings. Three months away from the closing of this fiscal year, we have already had 129 filings. Just in this calendar year, Chapter 11 filings have increased 30%.
In each Chapter 11 case, our office must hold an Initial Debtor Interview (IDI) within 15 days from the filing of the petition and a meeting of creditors pursuant to 11 U.S.C. §341 (§341’s) after the first 20 days but before the 40th day of the filing of the petition. F.R.B.P. 2003.
The financial analysts hold the IDI’s in our office, and as a general rule they are scheduled on Mondays and Fridays, because we must frequently attend Chapter 7 or 13 §341’s on Tuesdays, Wednesdays and Thursdays.
Since we must share §341 space with the Chapter 7 trustees, who hold their §341’s on Tuesdays, Wednesdays and Thursdays, our Chapter 11 341’s are also regularly scheduled on Mondays and Fridays.
Attendance at an IDI and a §341 meeting is required, and failure to attend is grounds for dismissal under 11 U.S.C. §1112 (g) and (h).
We are experiencing an inordinate amount of unjustified requests to continue these meetings, as well as postponements due to the failure to timely submit the required bankruptcy and financial documents. These continuances disrupt the efficient administration of our Chapter 11 caseload and our office calendar.
Providing the requirement documents on a timely basis (at least 5 days before the scheduled IDI) and attending these meetings should be standard operating procedure for those attorneys who file Chapter 11 cases and the debtors who wish to avail themselves of the benefits of Chapter 11.
In response to any such unjustified absences our office will file Motions to Dismiss. In response to repeated instances of lack of compliance, our office will seek sanctions under 28 U.S.C. §1927, FRBP §9011, and 11 U.S.C. §105, pursuant to which the U.S. Department of Justice can recover costs, expenses and attorney’s fees reasonably incurred because of such conduct.