New Downtown UST Compliance Rules — Comments and Questions

Comments and questions re new compliance requirements for Downtown U.S. Trustee’s Office (Woodland Hills has more detailed instructions for their new rules!):

-The instructions to the Debtor’s Declaration re Compliance state that the tax returns are to be provided to the UST at the Initial Debtor Interview, but does not give another option in the event the returns are not provided at the IDI. Are you supposed to email or snail-mail? The UST analysts in Woodland Hills are adamant that no documents are mailed, except for large MORs.

-The Debtor’s Declaration re Compliance states that the Debtor must attach a Real Property Questionnaire for each real property it has an interest in.  But the UST’s Guidelines and Requirements for Chapter 11 Debtors in Possession (LA Division Cases Only) – Appendix A states that the Real Property Questionnaire must be provided to the UST in a separate email, with the following in the subject line “CH 11 COMPLIANCE 2:11-bk-12345-QQ; ABCD, INC.; USTLA5.” Therefore, the Real Property Questionnaire CANNOT be attached to the Debtor’s Declaration re Compliance.

-The Attorney’s 7 Day Package Checklist states, “[y]ou must attach each of the following documents or a satisfactory explanation…” and lists the following documents: Debtor’s Declaration re Compliance; Real Property Questionnaire; bank account information; insurance coverage; proof of licenses; list of insiders; financial statements; health care business; trust agreements; recordation of Chapter 11 petition; federal and state tax returns; employee benefit plans; projected cash flow statement; Statement of Major Issues. Again, the UST’s Guidelines and Requirements for Chapter 11 Debtors in Possession (LA Division Cases Only) – Appendix A states that the Debtor’s Declaration re Compliance, the Real Property Questionnaire, and the Owned Property Summary Sheet must all be submitted in separate emails with a corresponding and specific subject line. Thus, only the projected cash flow statement and Statement of Major Issues can really be “attached” to the checklist, as those are not required to be submitted separately.

Something does not feel right about having my clients sign, and signing myself, forms that state a certain document is attached to the form when I know it CANNOT be attached and submitted together because other UST instructions state they must submitted under separate cover.

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