The US Trustee
The US Trustee (UST) is an officer of the Justice Department. There are currently 21 USTs for the nation. Their territories often overlap several judicial districts. USTs are appointed by the Attorney General to five year terms.
The primary roles of the UST are to monitor the progress of the Chapter 11 cases (especially those where there is little creditor involvement) and appoint and supervise case trustees when the law requires a trustee or the court has ordered a trustee to be appointed. The UST is also charged with monitoring employment applications of professionals, fee applications, and the activities of the creditors' committees. On rare occasions, the UST will act as the case trustee.
With the exception of their role as supervisor of trustees, the role of the UST is essentially one of bringing matters before the court, just as any other litigant. Thus, the UST may object to a fee application as being excessive or move that a Chapter 11 case be converted because the debtor lacks the ability to reorganize. It remains the function of the court to rule on such matters. Although there is some authority to the contrary, the UST probably has the power to appeal court rulings.
As an official of the executive branch of government, the UST is not part of the rest of the bankruptcy court system which as an adjunct of the district court is part of the judicial branch. Many bankruptcy judges have resisted the idea of giving such a large role in the judicial process to a Justice Department official. Since most of the UST’s powers are observatory with final decisions resting with the judges, the effectiveness to a large degree depends on the relationship with the judges. In districts where the courts and the UST have an exceptionally good relationship the UST may prevail so often that litigants will almost automatically accede to the USTs suggestions or directions, giving the UST great practical ability in bankruptcy cases. In districts where the courts and the UST have a strained relationship, the UST may prevail so infrequently that it is ignored.
