PRIA, Government Policy, Made Personal

Summary

Gives the debtor in possession the same rights, powers, and duties that a court-appointed trustee would have, as long as trustee limits or court rules allow. The debtor in possession cannot be paid under section 330 and does not have to perform the duties listed in sections 1106(a)(2), (3), and (4). Even if section 327(a) says otherwise, a person is not automatically barred from being hired under section 327 just because they worked for or represented the debtor before the case started.

Title 11, §1107

Bankruptcy, Source: USLM XML via OLRC

(a)Subject to any limitations on a trustee serving in a case under this chapter, and to such limitations or conditions as the court prescribes, a debtor in possession shall have all the rights, other than the right to compensation under section 330 of this title, and powers, and shall perform all the functions and duties, except the duties specified in section 1106(a)(2), (3), and (4) of this title, of a trustee serving in a case under this chapter.

(b)Notwithstanding section 327(a) of this title, a person is not disqualified for employment under section 327 of this title by a debtor in possession solely because of such person’s employment by or representation of the debtor before the commencement of the case.

Notes & Related Subsidiaries

Historical and Revision Notes

Legislative Statements

The House amendment adopts section 1107(b) of the Senate amendment which clarifies a point not covered by the House bill.

senate report no. 95–989

This section places a debtor in possession in the shoes of a trustee in every way. The debtor is given the rights and powers of a chapter 11 trustee. He is required to perform the functions and duties of a chapter 11 trustee (except the investigative duties). He is also subject to any limitations on a chapter 11 trustee, and to such other limitations and conditions as the court prescribes cf. Wolf v. Weinstein, 372 U.S. 633, 649–650 (1963).

Editorial Notes

Amendments

1984—Subsec. (a). Pub. L. 98–353 substituted “on a trustee serving in a case” for “on a trustee”.

Statutory Notes and Related Subsidiaries

Effective Date

of 1984 AmendmentAmendment 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.

§1107 Rights, Powers, and Duties of Debtor in Possession