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THE
FEDERATED STATES
OF MICRONESIA
RULES OF
BANKRUPTCY PROCEDURE
(also see FSM Bankruptcy Code)
PART I. SCOPE OF RULES--AND FORMS; Short Title.
6
Rule 1001. Scope of
Rules and Forms; Short Title.
6
Rule 1002. Start of Case.
6
Rule 1003. Involuntary
Application.
6
Rule 1004. Involuntary
Application Against a Partnership.
6
Rule 1004.1. Application
for an Infant or Incompetent Person.
6
Rule 1005. Caption of
Application.
7
Rule 1006. Filing Fee.
7
Rule 1007. Lists,
Schedules and Statements; Time Limits.
7
Rule 1008. Verification
of Applications and Accompanying Papers.
10
Rule 1009. Amendments of
Voluntary Applications, Lists, Schedules and Statements.
10
Rule 1010. Service of
Involuntary Application and Summons.
10
Rule 1011. Responsive
Pleading or Motion in Involuntary Cases.
10
Rule 1013.1. Hearing and
Disposition of Application in Involuntary Cases.
11
Rule 1014. Dismissal and
Change of Venue.
11
Rule 1015. Consolidation
of Cases Pending in Same State.
12
Rule 1016. Death or
Incompetence of Debtor
12
Rule 1017. Dismissal or
Conversion of Case; Suspension.
12
Rule 1018. Contested
Involuntary Applications; Proceedings to Vacate Order for Relief;
Applicability of Rules in Part VII Governing Adversary Proceedings.
13
Rule 1019. Conversion of
Chapter 3 Reorganization Case to Chapter 2 Liquidation Case
13
PART II COMMENCEMENT
OF CASE15
Rule 2001. Appointment
of Interim Receiver Before Order for Relief in a Chapter 2 Liquidation
Case
15
Rule 2002. Notices to
Creditors, Equity Security Holders, and Federated States of Micronesia
15
Rule 2003. Meeting of
Creditors or Equity Security Holders.
19
Rule 2004. Examination.
20
Rule 2005. Apprehension
and Removal of Debtor to Compel Attendance for Examination
21
Rule 2006. Solicitation
and Voting of Proxies in Chapter 2 Liquidation Cases.
21
Rule 2007. Review of
Appointment of Creditors' Committee Organized Before Case's Start
23
Rule 2007.1. Appointment
of Trustee or Examiner in a Chapter 3 Reorganization Case Order to
appoint trustee or examiner. In a chapter 3 reorganization case, a
motion for an order to appoint an examiner or a trustee under §
302 of Title 31 shall be made in accordance with Rule 9014.
24
Rule 2008. Notice to
Receiver or Trustee of Selection.
24
Rule 2009. Receivers or
Trustees for Estates When Joint Administration Ordered.
24
Rule 2010. Qualification
by Receiver or Trustee; Proceeding on Bond.
24
Rule 2011. Evidence of
Debtor in Possession or Qualification of Trustee.
25
Rule 2012. Substitution
of Receiver or Trustee; Successor; Accounting.
25
Rule 2013. Public Record
of Compensation Awarded to Trustees and Receivers, Examiners, and
Professionals.
25
Rule 2014. Employment of
Professional Persons.
26
Rule 2015. Duty to Keep
Records, Make Reports, and Give Notice of Case.
26
Rule 2016. Compensation
for Services Rendered and Reimbursement of Expenses.
27
Rule 2017. Examination
of Debtor's Transactions with Debtor's Attorney.
28
Rule 2018. Intervention;
Right to Be Heard.
28
Rule 2019.
Representation of Creditors and Equity Security Holders in Chapter 3
Reorganization Cases
29
PART III. CLAIMS
AND DISTRIBUTION TO CREDITORS AND EQUITY INTEREST HOLDERS; PLANS
30
Rule 3001. Proof of Claim..
30
Rule 3002. Filing Proof
of Claim or Interest
31
Rule 3003. Filing Proof
of Claim or Equity Security Interest in Chapter 3 Reorganization Cases
32
Rule 3004. Filing of
Claims by Debtor or Receiver or Trustee.
33
Rule 3005. Filing of
Claim, Acceptance, or Rejection By Guarantor, Surety, Indorser, or
Other Co-debtor
33
Rule 3006. Withdrawal of
Claim; Effect on Acceptance or Rejection of Plan.
34
Rule 3007. Objections to
Claims.
34
Rule 3008.
Reconsideration of Claims.
34
Rule 3009. Declaration
and Payment of Dividends in a Chapter 2 Liquidation Case.
34
Rule 3010. Small
Dividends and Payments in Chapter 2 Liquidation Cases.
34
Rule 3011. Unclaimed
Funds in Chapter 2 Liquidation Cases.
35
Rule 3012. Valuation of
Security.
35
Rule 3013.
Classification of Claims and Interests.
35
Rule 3016. Filing of
Plan and Disclosure Statement in a Chapter 3 Reorganization Case
35
Rule 3017. Court
Consideration of Disclosure Statement in a Chapter 3 Reorganization Case
35
Rule 3017.1. Court
Consideration of Disclosure Statement
37
Rule 3018. Acceptance or
Rejection of Plan in a Chapter 3 Reorganization Case.
38
Rule 3019. Modification
of Accepted Plan Before Confirmation in a Chapter 3 Reorganization Case
39
Rule 3020. Deposit;
Confirmation of Plan in a Chapter 3 Reorganization Case.
39
Rule 3021. Distribution
Under Plan.
40
Rule 3022. Final Decree
in Chapter 3 Reorganization Case.
40
PART IV. THE
DEBTOR: DUTIES AND BENEFITS..
40
Rule 4001. Relief from
Automatic Stay; Prohibiting or Conditioning the Use, Sale, or Lease of
Property; Use of Cash Collateral; Obtaining Credit; Agreements.
40
Rule 4002. Debtor's
Duties.
42
Rule 4003. Exemptions.
43
Rule 4004. Grant or
Denial of Discharge.
43
Rule 4005. Burden of
Proof in Objecting to Discharge.
44
Rule 4006. Notice of No
Discharge.
44
Rule 4007. Determination
of Dischargeability of a Debt
45
Rule 4008. Discharge and
Reaffirmation Hearing.
45
PART V. COURTS AND
CLERKS..
45
Rule 5001. Courts and
Clerks' Offices.
45
Rule 5002. Restrictions
on Appointments.
46
Rule 5003. Records Kept
By the Clerk.
46
Rule 5004.
Disqualification.
47
Rule 5005. Filing.
47
Rule 5006. Certification
of Copies of Papers.
47
Rule 5007. Record of
Proceedings and Transcripts.
47
Rule 5009. Closing
Chapter 2 Liquidation Cases.
48
Rule 5010.
Disqualification.
48
Rule 5011. Abstention
from Hearing a Proceeding.
48
PART VI.
COLLECTION AND LIQUIDATION OF THE ESTATE..
48
Rule 6001. Burden of
Proof for Validity of Postapplication Transfer
48
Rule 6002. Accounting by
Prior Custodian of Property of the Estate.
48
Rule 6004. Use, Sale, or
Lease of Property.
49
Rule 6005. Appraisers
and Auctioneers.
50
Rule 6006. (a)
Proceeding to assume, reject, or assign.A proceeding to assume, reject,
or assign an executory contract or unexpired lease, other than as part
of a plan, is governed by Rule 9014.
50
Rule 6007. Abandonment
or Disposition of Property.
50
Rule 6008. Redemption of
Property from Lien or Sale.
50
Rule 6009. Prosecution
and Defense of Proceedings by Trustee or Debtor in Possession
50
Rule 6010. Proceeding to
Avoid Indemnifying Lien or Transfer to Surety.
51
PART VII.
ADVERSARY PROCEEDINGS..
51
Rule 7001. Scope of
Rules of Part VII
51
Rule 7002. References to
FSM Rules of Civil Procedure.
51
Rule 7003. Start of
Adversary Proceeding.
51
Rule 7004. Process;
Service of Summons, Complaint
51
Rule 7005. Service and
Filing of Pleadings and Other Papers.
54
Rule 7007. Pleadings
Allowed.
54
Rule 7007.1. Corporate
Ownership Statement
54
Rule 7008. General Rules
of Pleading.
54
Rule 7009. Pleading
Special Matters.
54
Rule 7010. Form of
Pleadings.
54
Rule 7012. Defenses and
Objections When and How Presented By Pleading or Motion Motion for
Judgment on the Pleadings.
55
Rule 7013. Counterclaim
and Cross-Claim..
55
Rule 7014. Third-Party
Practice.
55
Rule 7015. Amended and
Supplemental Pleadings.
55
Rule 7016. Pre-Trial
Procedure; Formulating Issues.
56
Rule 7017. Parties
Plaintiff and Defendant; Capacity.
56
Rule 7018. Joinder of
Claims and Remedies.
56
Rule 7019. Joinder of
Persons Needed for Just Determination.
56
Rule 7020. Permissive
Joinder of Parties.
56
Rule 7021. Misjoinder
and Non-Joinder of Parties.
56
Rule 7022. Interpleader
56
Rule 7023. Class
proceedings.
56
Rule 7023.1. Derivative
Proceedings by Shareholders.
56
Rule 7023.2. Adversary
Proceedings Relating to Unincorporated Associations.
56
Rule 7024. Intervention.
56
Rule 7025. Substitution
of Parties.
57
Rule 7026. General
Provisions Governing Discovery.
57
Rule 7027. Depositions
Before Adversary Proceedings or Pending Appeal
57
Rule 7028. Persons
Before Whom Depositions May be Taken.
57
Rule 7029. Stipulations
Regarding Discovery Procedure.
57
Rule 7030. Depositions
Upon Oral Examination.
57
Rule 7031. Deposition
Upon Written Questions.
57
Rule 7032. Use of
Depositions in Adversary Proceedings.
57
Rule 7033.
Interrogatories to Parties.
57
Rule 7034. Production of
Documents and Things and Entry Upon Land for Inspection and Other
Purposes
57
Rule 7035. Physical and
Mental Examination of Persons.
57
Rule 7036. Requests for
Admission.
58
Rule 7037. Failure to
Make Discovery: Sanctions.
58
Rule 7041. Dismissal of
Adversary Proceedings.
58
Rule 7042. Consolidation
of Adversary Proceedings; Separate Trials.
58
Rule 7052. Findings by
the Court
58
Rule 7054. Judgments;
Costs.
58
Rule 7055. Default
58
Rule 7056. Summary
Judgment
58
Rule 7062. Stay of
Proceedings to Enforce a Judgment
58
Rule 7064. Seizure of
Person or Property.
59
Rule 7064. Injunctions.
59
Rule 7067. Deposit in
Court
59
Rule 7068. Offer of
Judgment
59
Rule 7069. Execution.
59
Rule 7070. Judgment for
Specific Acts; Vesting Title.
59
Rule 7071. Process in
Behalf of and Against Persons Not Parties.
59
Rule 7087. Transfer of
Adversary Proceeding.
59
PART VIII. APPEALS
TO APPELLATE DIVISION..
60
Rule 8001. Manner of
Taking Appeal; Voluntary Dismissal
60
Rule 8002. Time for
Filing Notice of Appeal
60
Rule 8003. Leave to
Appeal
61
Rule 8004. Service of
the Notice of Appeal
62
Rule 8005. Stay Pending
Appeal
62
Rule 8006. Record and
Issues on Appeal
63
Rule 8007. Completion
and Transmission of the Record; Docketing of the Appeal
63
Rule 8008. Filing and
Service.
63
Rule 8009. Briefs and
Appendix; Filing and Service.
63
Rule 8010. Form of
Briefs; Length.
64
Rule 8011. Motions.
64
Rule 8012. Oral Argument
64
Rule 8013. Disposition
of Appeal; Weight Accorded Trial Judge's Findings of Fact
65
Rule 8014. Costs.
65
Rule 8015. Motion for
Rehearing.
65
Rule 8016. Appellate
Clerk's Duties.
65
Rule 8019. Suspension of
Rules in Part VIII
65
Rule 8020. Damages and
Costs for Frivolous Appeal
65
PART IX. GENERAL
PROVISIONS..
65
Rule 9001. General
Definitions.
65
Rule 9002. Meanings of
Words in the Rules of Civil Procedure When Applicable to Cases Under
Title 31
66
Rule 9003. Prohibition
of Ex Parte Contacts.
66
Rule 9004. General
Requirements of Form; Filing.
67
Rule 9005. Harmless Error
67
Rule 9006. Time.
67
Rule 9007. General
Authority to Regulate Notices.
68
Rule 9008. Service or
Notice by Publication.
68
Rule 9009. Forms.
69
Rule 9010.
Representation and Appearances; Powers of Attorney.
69
Rule 9011. Signing of
Papers; Representations to the Court; Sanctions; Verification and
Copies of Papers
69
Rule 9012. Oaths and
Affirmations.
71
Rule 9013. Motions.
71
Rule 9014. Contested
Matters.
72
Rule 9016. Subpoena.
73
Rule 9017. Evidence.
73
Rule 9018. Secret
Confidential, Scandalous, or Defamatory Matter
73
Rule 9019. Compromise
and Arbitration.
73
Rule 9020. Contempt
Proceedings.
74
Rule 9014 governs a
motion for an order of contempt made by an interested party.
74
Rule 9021. Entry of
Judgment
74
Rule 9022. Notice of
Judgment or Order
74
Rule 9023. New Trials;
Amendment of Judgments.
74
Rule 9024. Relief from
Judgment or Order
74
Rule 9025. Security:
Proceedings Against Sureties.
74
Rule 9026. Exceptions
Unnecessary.
74
Rule 9027. Removal
75
Rule 9028. Judge's
Disability.
75
Rule 9030. Jurisdiction
and Venue Unaffected.
75
Rule 9031. Masters Not
Authorized.
75
Rule 9032. Effect of
Amendment of FSM Rules of Civil Procedure.
75
Rule 9035. Citation form.
75
Rule 9036. Notice by
electronic transmission.
75
PART I. SCOPE
OF RULES--AND FORMS;
Short Title
Rule
1001. Scope of Rules and Forms; Short Title
The
Bankruptcy Rules and Forms govern procedure in cases under Title 31
of the Code of the Federated States of Micronesia . The rules shall be
cited as
the FSM Rules of Bankruptcy Procedure and the forms as the Official
Bankruptcy
Forms. These rules shall be construed to secure the just, speedy, and
inexpensive determination of every case and proceeding.
Rule
1002. Start of Case
An
application starting a case under Title 31 shall be filed with the
clerk."
Rule
1003. Involuntary Application
(a)
Transferor or transferee of claim. A transferor or transferee of a
claim shall annex to the original and each copy of the application a
copy of
all documents evidencing the transfer, whether transferred
unconditionally, for
security, or otherwise, and a signed statement that the claim was not
transferred for the purpose of starting the case and setting forth the
consideration for and terms of the transfer. An entity that has
transferred or
acquired a claim for the purpose of starting a case for liquidation
under
chapter 2 or for reorganization under chapter 3 shall not be a
qualified
applicant.
Rule
1004. Involuntary Application Against a Partnership
After
filing of an involuntary application, (1) the applying partners or
other applicants shall promptly send to or serve on each general
partner who is
not an applicant, a copy of the application; and (2) the clerk shall
promptly
issue a summons for service on each general partner who is not an
applicant.
Rule 1010 applies to the form and service of the summons.
Rule
1004.1. Application for an Infant or Incompetent
Person
If an
infant or incompetent person has a representative, including a
general guardian, committee, conservator, or similar fiduciary, the
representative may file a voluntary application on behalf of the infant
or
incompetent person. An infant or incompetent person who does not have a
duly
appointed representative may file a voluntary application by next
friend or
guardian ad litem. The court shall appoint a guardian ad litem for an
infant or
incompetent person who is a debtor and is not otherwise represented or
shall
make any other order to protect the infant or incompetent debtor.
Rule
1005. Caption of Application
The
caption of an application starting a case under Title 31 shall
contain the name of the court, the title of the case, and the docket
number.
The title of the case must include the following information about the
debtor:
name and all other names used within six years before filing the
application.
If the application is not filed by the debtor, it shall include all
names used
by the debtor which are known to applicants.
Rule
1006. Filing Fee
(a)
General requirement. Every application shall be accompanied by the
filing fee except as provided in subdivision (b) . The filing fee is
$50.00,
and is payable to the clerk upon the start of a case under Title 31.
(b)
Payment of filing fee in installments.(1) Petition for permission to
pay filing fee in installments. A voluntary application by an
individual shall
be accepted for filing if accompanied by the debtor's signed petition
stating
that the debtor is unable to pay the filing fee except in installments.
The
application must state the proposed terms of the installment payments
and that
the applicant has neither paid any money nor transferred any property
to an
attorney for services in connection with the case. (2) Action on
petition.
Before the meeting of creditors, the court may order the filing fee
paid to the
clerk or grant leave to pay in installments and fix the number, amount
and
dates of payment. The number of installments shall not exceed five, and
the
final installment shall be payable not later than 120 days after filing
the
application. For cause shown, the court may extend the time of any
installment,
provided the last installment is paid not later than 180 days after
filing the
application. (3) Postponement of attorney's fees. The filing fee must
be paid
in full before the debtor or chapter 2 receiver may pay an attorney or
any
other person who renders services to the debtor in connection with the
case.
Rule
1007. Lists, Schedules and Statements; Time
Limits
(a) List
of creditors and equity security holders, and corporate
ownership statement
(1)
Voluntary case. In a voluntary case, the debtor
shall file with the application a list containing the name and address
of each
creditor unless the application is accompanied by a schedule of
liabilities. If
the debtor is a corporation, the debtor shall file with the application
a
corporate ownership statement containing the information described in
Rule
7007.1. The debtor shall file a supplemental statement promptly upon
any change
in circumstances that renders the corporate ownership statement
inaccurate.
(2)
Involuntary case. In an involuntary case, the
debtor shall file within 15 days after entry of the order for relief
under Rule
1013(b) , a list containing the name and address of each creditor
unless a
schedule of liabilities has been filed.
(3)
Equity security holders. In a chapter 3
reorganization case, unless the court orders otherwise, the debtor
shall file
within 15 days after entry of the order for relief a list of the
debtor's
equity security holders of each class showing the number and kind of
interests
registered in the name of each holder, and the last known address or
place of
business of each holder.
(4)
Extension of time. Any extension of time for
the filing of the lists required by this subdivision may be granted
only on
motion for cause shown and on notice to any receiver appointed under
§ 201 of
Title 31 or any trustee appointed under § 302 of Title 31, or
other party as
the court may direct.(4) Extension of time. Any extension of time for
the
filing of the lists required by this subdivision may be granted only on
motion
for cause shown and on notice to any receiver appointed under §
201 of Title 31
or any trustee appointed under § 302 of Title 31, or other party
as the court
may direct.
(b)
Schedules and statements required. The debtor, unless the court
orders otherwise, shall file schedules of assets and liabilities, a
schedule of
current income and expenditures, a schedule of executors contracts and
unexpired leases, and a statement of financial affairs, prepared as
prescribed
by the appropriate Official Forms.
(c) Time
limits The schedules and statements shall be filed with the
application in a voluntary case, or if the application is accompanied
by a list
of all the debtor's creditors and their addresses, within 15 days
thereafter,
except as otherwise provided in subdivisions (d) , (e) , (f) , and (h)
. In an
involuntary case, the schedules and statements shall be filed by the
debtor
within 15 days after entry of the order for relief under Rule 1013(b) .
Schedules
and statements filed before the conversion of a case to another chapter
shall
be deemed filed in the converted case unless the court directs
otherwise. Any
extension of time for the filing of the schedules and statements may be
granted
only on motion for cause shown and on notice to the trustee, receiver,
or other
party as the court may direct. Notice of an extension must be given to
the
receiver or trustee and to any other party as the court may direct.
(d) List
of 20 largest creditors in chapter 3 reorganization case. In
addition to the list required by subdivision (a) , a debtor in a
voluntary
chapter 3 reorganization case shall file with the application a list
containing
the name, address and claim of the creditors that hold the 20 largest
unsecured
claims, excluding insiders, as prescribed by the appropriate Official
Form. In
an involuntary chapter 3 reorganization case, this list shall be filed
by the
debtor within 2 days after entry of the order for relief under Rule
1013(b) .
(e)
Statement of social security number. An individual debtor shall
submit a verified statement that sets out the debtor's social security
number,
or states that the debtor does not have a social security number. In a
voluntary case, the debtor shall submit the statement with the
application. In
an involuntary case, the debtor shall submit the statement within 15
days after
the entry of the order for relief.
(f)
Partnership and partners. The general partners of a debtor
partnership shall prepare and file the schedules of the assets and
liabilities,
schedule of current income and expenditures, schedule of executors
contracts
and unexpired leases, and statement of financial affairs of the
partnership.
The court may order any general partner to file a statement of personal
assets and
liabilities within such time as the court may fix.
(g)
Interests acquired or arising after application. If the debtor
acquires or becomes entitled to acquire any interest in property, the
debtor
must within 10 days after the information comes to the debtor's
knowledge or
within such further time the court may allow, file a supplemental
schedule in
the case. If any of the property required to be reported under this
subdivision
is claimed by the debtor as exempt, the debtor shall claim the
exemptions in
the supplemental schedule. The duty to file a supplemental schedule in
accordance with this subdivision continues notwithstanding the case's
closing,
except that the schedule need not be filed in a chapter 3 case with
respect to
property acquired after entry of the order confirming a chapter 3 plan.
(h)
Disclosure of list of security holders. After notice and hearing and
for cause shown, the court may direct an entity other than the
receiver, debtor
or trustee to disclose any list of security holders of the debtor in
its
possession or under its control, indicating the name, address and
security held
by any of them. The entity possessing this list may be required either
to
produce the list or a true copy thereof, or permit inspection or
copying, or
otherwise disclose the information contained on the list.
(I)
Impounding of lists. On an interested party's motion and for cause
shown the court may direct the impounding of the lists filed under this
rule,
and may refuse to permit inspection by any entity. The court may permit
inspection or use of the lists, however, by any interested party on
terms
prescribed by the court.
(j)
Preparation of list, schedules, or statements on default of debtor.
If a list, schedule, or statement is not prepared and filed as required
by this
rule, the court may order the receiver, trustee, an applying creditor,
or other
party to prepare and file any of these papers within a time fixed by
the court.
The court may approve reimbursement of the cost incurred in complying
with the
order as an administrative expense.
(k)
Infants and Incompetent Persons. If the debtor knows that a person
on the list of creditors or schedules is an infant or incompetent
person, the
debtor also shall include the name, address, and legal relationship of
any
person upon whom process would be served in an adversary proceeding
against the
infant or incompetent person in accordance with Rule 7004(b) (2) .
Rule
1008. Verification of Applications and
Accompanying Papers
All
applications, lists, schedules, statements, and amendments thereto
shall be verified.
Rule
1009. Amendments of Voluntary Applications,
Lists, Schedules and Statements
The
debtor may amend a voluntary application, list, schedule, or
statement as a matter of course at any time before the case is closed.
The
debtor shall give notice of the amendment to the receiver or trustee
and to any
entity affected thereby. On an interested party's motion, after notice
and a
hearing, the court may order any voluntary application, list, schedule,
or
statement.
Rule
1010. Service of Involuntary Application and
Summons
On the
filing of an involuntary application, the clerk shall forthwith
issue a summons for service. Service must be made on the debtor. The
summons
shall be served with a copy of the application in the manner provided
for
service of a summons and complaint by Rule 7004(a) or (b) . If service
cannot
be so made, the court may order that the summons and application be
served by
mailing copies to the party's last known address, and by at least one
publication under Rule 9008 in a manner and form directed by the court.
The
summons and application may be served on the party anywhere. Rule
7004(e) and
FSM Civil Procedure Rule 4(g) and (h) apply when service is made or
attempted
under this rule.
Rule
1011. Responsive Pleading or Motion in
Involuntary Cases
(a) Who
may contest application. The debtor named in an involuntary
application may contest the application. In the case of an application
against
a partnership under Rule 1004, a no applying general partner, or a
person who
is alleged to be a general partner but denies the allegation, may
contest the
application.
(b)
Defenses and objections; when presented. Defenses and objections to
the application shall be presented in the manner prescribed by FSM
Civil
Procedure Rule 12 and shall be filed and served within 20 days after
service of
the summons, except that if service is made by publication on a party
or
partner not residing or found within the state in which the court sits,
the
court shall prescribe the time for filing and serving the response.
(c)
Effect of motion. Service of a motion under FSM Civil Procedure Rule
12(b) shall extend the time for filing and serving a responsive
pleading as
permitted by FSM Civil Procedure Rule 12(a) .
(d)
Claims against applicants. A claim against an applying creditor may
not be asserted in the answer except for the purpose of defeating the
application.
(e) Other
pleadings. No other pleadings shall be permitted, but the
court may order a reply to an answer and prescribe the time for filing
and
service.
Rule
1013.1. Hearing and Disposition of Application in
Involuntary Cases
(a)
Contested application. The court shall determine the issues of a
contested application at the earliest practicable time and forthwith
enter an
order for relief, dismiss the application, or enter any other
appropriate
order.
(b)
Default. If no pleading or other defense to an application is filed
within the time provided by Rule 1011, the court, on the next day, or
as soon
thereafter as practicable, shall enter an order for the relief
requested in the
application.
Rule
1014. Dismissal and Change of Venue
(a)
Dismissal and Transfer of cases.
(1) Cases
filed in proper state. If an application
is filed in a proper state, on an interested party's timely motion, and
after
hearing on notice to the applicants and other entities as directed by
the
court, the case may be transferred to any other state if the court
determines
that the transfer is in the interest of justice or for the parties'
convenience.
(2) Cases
filed in improper state. If an
application is filed in an improper state, on an interested party's
timely
motion and after hearing on notice to the applicants and other entities
as
directed by the court, the case may be dismissed or transferred to any
other
state if the court determines that transfer is in the interest of
justice or
for the convenience of the parties.
(b)
Procedure when applications involving the same debtor or related
debtors are filed in different states. If applications starting cases
under
Title 31 are filed in different states by or against (1) the same
debtor, or
(2) a partnership and one or more of its general partners, or (3) two
or more
general partners, or (4) a debtor and an affiliate, on motion filed in
the
state in which the application filed first is pending and after hearing
on
notice to the applicants and other entities as directed by the court,
the court
may determine, in the interest of justice or for the convenience of the
parties, the state or states in which the case or cases should proceed.
Except
as otherwise ordered by the court in the state in which the application
filed
first is pending, the proceedings on the other applications shall be
stayed by
the courts in which they have been filed until the determination is
made.
Rule
1015. Consolidation of Cases Pending in Same
State
(a) Cases
involving same debtor. If two or more applications are pending
in the same state by or against the same debtor, the court may order
consolidation of the cases.
(b) Cases
involving two or more related debtors. If a joint application
or two or more applications are pending in the same court by or against
(1) a
husband and wife, or (2) a partnership and one or more of its general
partners,
or (3) two or more general partners, or (4) a debtor and an affiliate,
the
court may order a joint administration of the estates. Before entering
an
order, the court shall give consideration to protecting creditors of
different
estates against potential conflicts of interest. An order directing
joint
administration of individual cases of a husband and wife shall, if one
spouse
has elected the exemptions under § 209(1) of Title 31 and the
other has elected
the exemptions under § 209(2) , fix a reasonable time within which
either may
amend the election so that both shall have elected the same exemptions.
The
order shall notify the debtors that unless they elect the same
exemptions
within the time fixed by the court, they will be deemed to have elected
the
exemptions provided by § 209(2) .
(c)
Expediting and protective orders. When an order for consolidation or
joint administration of two or more cases is entered under this rule,
while
protecting the rights of the parties under Title 31, the court may
enter orders
as may tend to avoid unnecessary costs and delay.
Rule
1016. Death or Incompetence of Debtor
The
debtor's death or incompetence shall not abate a liquidation case
under chapter 2 of Title 31. In such event, the estate shall be
administered
and the case concluded in the same manner, so far as possible, as
though the
death or incompetence had not occurred.
Rule
1017. Dismissal or Conversion of Case; Suspension
The
debtor's death or incompetence shall not abate a liquidation case
under chapter 2 of Title 31. In such event, the estate shall be
administered
and the case concluded in the same manner, so far as possible, as
though the
death or incompetence had not occurred.
(a)
Voluntary dismissal; dismissal for want of prosecution or other
cause. A case shall not be dismissed on the applicant's motion, or for
want of
prosecution, or other cause, or by the parties' consent before a
hearing on
notice as provided in Rule 2002. For such notice the debtor shall file
a list
of all creditors with their addresses within the time fixed by the
court unless
the list was previously filed. If the debtor fails to file the list,
the court
may order the preparing and filing by the debtor or other entity.
(b)
Dismissal for failure to pay filing fee.
(1) For
failure to pay any installment of the
filing fee, the court may after hearing on notice to the debtor and the
trustee
dismiss the case.
(2) If
the case is dismissed or the case closed
without full payment of the filing fee, the installments collected
shall be
distributed in the same manner and proportions as if the filing fee had
been
paid in full.
(3)
Notice of dismissal for failure to pay the
filing fee must be given within 30 days after the dismissal to
creditors
appearing on the list of creditors and to those who have filed claims,
in the
manner provided in Rule 2002.
(c)
Suspension. A case shall not be dismissed or proceedings suspended
under Rule 5011 before a hearing on notice as provided in Rule 2002(a) .
(d)
Procedure for dismissal or conversion .A proceeding to dismiss a
case or convert a case to another chapter of Title 31, is governed by
Rule
9014. Conversion or dismissal shall be on motion filed and served as
required
by Rule 9013.
(e)
Dismissal of individual debtor's chapter 2 case for substantial
abuse. The court may dismiss an individual debtor's case for
substantial abuse
only on the receiver's motion or on the court's own motion and after a
hearing
on notice to the debtor, the receiver, and any other entities as the
court
directs.
Rule
1018. Contested Involuntary Applications;
Proceedings to Vacate Order for Relief; Applicability of Rules in Part
VII
Governing Adversary Proceedings
The
following rules in Part VII apply to all proceedings relating to a
contested involuntary application and to all proceedings to vacate an
order for
relief: Rules 7005, 7008-7010, 7015, 7016, 7024-7026, 7028-7037, 7052,
7054,
7056, and 7062, except as otherwise provided in Part I of these rules
and
unless the court otherwise directs. The court may direct that other
rules in
Part VII shall also apply. For the purposes of this rule a reference in
the
Part VII rules to adversary proceedings shall be read as a reference to
proceedings relating to a contested involuntary application or
proceedings to
vacate an order for relief. Reference in the FSM Rules of Civil
Procedure to
the complaint shall be read as a reference to the application.
Rule
1019. Conversion of Chapter 3 Reorganization Case
to Chapter 2 Liquidation Case
When a
chapter 3 case has been converted or reconverted to a chapter 2
case:
(1)
Filing of lists, inventories, schedules,
statements. Lists, inventories, schedules, and statements of financial
affairs
theretofore filed shall be deemed to be filed in the chapter 2 case,
unless the
court directs otherwise. If they have not been previously filed, the
debtor
shall comply with Rule 1007 as if an order for relief had been entered
on an
involuntary application on the date of the entry of the order directing
that
the case continue under chapter 2.
(2) New
filing periods. A new time period for
filing claims, a complaint objecting to discharge, or a complaint to
obtain a
determination of discharge ability of any debt shall start under Rules
3002,
4004, or 4007, except a new time period shall not start if a chapter 2
case had
been converted to a chapter 3 case and thereafter reconverted to a
chapter 2
case and the time for filing claims, a complaint objecting to
discharge, or a
complaint to obtain a determination of the discharge ability of any
debt, or
any extension thereof, expired in the original chapter 2 case.
(3)
Claims filed before conversion. All claims
actually filed by a creditor before conversion of the case are deemed
filed in
the chapter 2 case.
(4)
Turnover of records and property. After
qualification of, or assumption of duties by the chapter 2 receiver,
any debtor
in possession or trustee previously acting in the chapter 3 case shall,
forthwith, unless otherwise ordered, turn over to the chapter 2
receiver all
records and property of the estate in the possession or control of the
debtor
in possession or trustee.
(5)
Filing final report and schedule of post
application debts.
(a)
Conversion of Chapter 3 case.
Unless the court directs otherwise, if a chapter 3 case is converted to
chapter
2, the debtor in possession or, if the debtor is not a debtor in
possession,
the trustee serving at the time of conversion, shall not later than 15
days
after conversion of the case, file a schedule of unpaid debts incurred
after
the application's filing and before conversion of the case, including
the name
and address of each holder of a claim.;
(b)
Conversion after confirmation
of a plan. Unless the court orders otherwise, if a chapter 3 case is
converted
to chapter 2 after confirmation of a plan, the debtor shall file:
(i) a
schedule of property not
listed in the final report and account acquired after the application's
filing
but before conversion.
(ii) a
schedule of unpaid debts
not listed in the final report and account incurred after confirmation
but
before the conversion; and
(iii) a
schedule of executors
contracts and unexpired leases entered into or assumed after the
application's
filing but before conversion.
(6)
Filing of post application claims; notice. On
the filing of the unpaid debts schedule, the clerk, or some other
person as the
court may direct, shall give notice to those entities, including the
Federated
States of Micronesia , any state, or any subdivision thereof, that
their claims
may be filed under Rules 3001(a) -(d) and 3002. Unless a notice of
insufficient
assets to pay a dividend is mailed under Rule 2002(e) , the court shall
fix the
time for filing claims arising from the rejection of executors
contracts or
unexpired leases under § 202(1) (c) of Title 31.
PART II
Rule
2001. Appointment of Interim Receiver Before
Order for Relief in a Chapter 2 Liquidation Case
(A)
Appointment. At any time after the start of an involuntary
liquidation case and before an order for relief, the court on an
interested party's
written motion may order the appointment of an interim receiver. The
motion
shall set forth the necessity for the appointment and may be granted
only after
hearing on notice to the debtor, the applying creditors, and other
interested
parties as the court may designate.
(b)
Movant's bond. An interim receiver may not be appointed under this
rule unless the movant furnishes a bond in an amount approved by the
court,
conditioned to indemnify the debtor for costs, attorney's fee,
expenses, and
damages.
(c)
Appointment Order. The order directing the appointment of an interim
receiver shall state the reason the appointment is necessary and shall
specify
the receiver's duties.
(d)
Turnover and report. After qualification of the receiver selected
under § 201(1) of Title 31, the interim receiver, unless otherwise
ordered,
shall (1) forthwith deliver to the receiver all of the estate's records
and
property in the interim receiver's possession or control and, (2)
within 30
days thereafter file a final report and account.
Rule
2002. Notices to Creditors, Equity Security
Holders, and Federated
States of Micronesia
When a
chapter 3 case has been converted or reconverted to a chapter 2
case:
(a)
Twenty-day notices to interested parties. Except as provided in
subdivisions (h) , (i) , and (k) , the clerk, or some other person as
the court
may direct, shall give the debtor, the trustee, all creditors and
indenture
trustees at least 20 days' notice by mail of:
(1) the
creditors' meeting under § 308 of Title 31,
which notice, unless the court orders otherwise, shall include the
debtor's
employer identification number and any other FSM taxpayer
identification
number;
(2) a
proposed use, sale, or lease of property of
the estate other than in the ordinary course of business, unless the
court for
cause shown shortens the time or directs another method of giving
notice;
(3) the
hearing on approval of a compromise or
settlement of a controversy other than approval of an agreement under
Rule
4001(d) , unless the court for cause shown directs that notice not be
sent;
(4) the
hearing on the case's dismissal or the
conversion of the case to another chapter;
(5) the
time fixed to accept or reject a proposed
modification of a plan;
(6) a
hearing on any entity's request for
compensation or reimbursement of expenses if the request exceeds $500;
and
(7) the
time fixed for filing proofs of claims
under Rule 3003(c) .
(b )
Twenty-five-day notices to interested parties. Except as provided
in subdivision (1) , the clerk, or some other person as the court may
direct,
shall give the debtor, the trustee, all creditors and indenture
trustees not
less than 25 days notice by mail of
(1) the
time fixed for filing objections and the
hearing to consider approval of a disclosure statement; and
(2) the
time fixed for filing objections and the
hearing to consider confirmation of a chapter 3 plan.
(c)
Content of notice.
(1)
Proposed use, sale, or lease of property.
Subject to Rule 6004, the notice of a proposed use, sale, or lease of
property
required by subdivision (a) (2) shall include the time and place of any
public
sale, the terms and conditions of any private sale and the time fixed
for
filing objections. The notice of a proposed use, sale, or lease of
property,
including real estate, is sufficient if it generally describes the
property.
(2)
Notice of hearing on compensation. The notice
of a hearing on an application for compensation or reimbursement of
expenses
required by subdivision (a) (6) shall identify the applicant and the
amounts requested.
(3)
Notice of Hearing on Confirmation When Plan
Provides for an Injunction. If a plan provides for an injunction
against
conduct not otherwise enjoined under Title 31, the notice required
under Rule
2002(b) (2) shall:
(A)
include in conspicuous language
(bold, italic, or underlined text) a statement that the plan proposes
an
injunction;
(B)
describe briefly the nature
of the injunction; and
(C)
identify the entities that
would be subject to the injunction.
(d)
Notice to equity security holders. In a chapter 3 reorganization
case, unless otherwise ordered by the court, the clerk, or some other
person as
the court may direct, shall in the manner and form directed by the
court give
notice to all equity security holders of
(1) the
order for relief;
(2) any
meeting of equity security holders;
(3) the
hearing on the proposed sale of all or
substantially all of the debtor's assets;
(4) the
hearing on the dismissal or conversion of a
case to another chapter;
(5) the
time fixed for filing objections to and the
hearing to consider approval of a disclosure statement;
(6) the
time fixed for filing objections to and the
hearing to consider confirmation of a plan; and
(7) the
time fixed to accept or reject a proposed
modification of a plan.
(e)
Notice of no dividend. In a chapter 2 liquidation case, if it
appears from the schedules that there are no assets from which a
dividend can
be paid, the notice may include a statement to that effect; that it is
unnecessary to file claims; and that if sufficient assets become
available for
the payment of a dividend, further notice will be given for the filing
of
claims.
(f)
Othier notices. Except as provided in subdivision (l) , the clerk,
or some other person as the court may direct, shall give the debtor and
all
creditors notice by mail of:
(1) the
order for relief;
(2) the
dismissal or the conversion of the case to
another chapter;
(3) the
time allowed for filing claims under Rule
3002;
(4) the
time fixed for filing a complaint objecting
to the debtor's discharge under § 208 of Title 31 as provided in
Rule 4004;
(5) the
time fixed for filing a complaint to
determine the discharge ability of a debt under § 208 of Title 31
as provided
in Rule 4007;
(6) the
waiver, denial, or revocation of a
discharge as provided in Rule 4006;
(7) entry
of a order confirming a chapter 3 plan;
and
(8) a
summary of the receiver's final report in a
chapter 2 case if the net proceeds realized exceed $1,500.
Notice of
the time fixed for accepting or rejecting a plan under Rule
3017(c) shall be given in accordance with Rule 3017(d) .
(g)
Addresses of notices.
(1)
Notices required to be mailed under Rule 2002
to a creditor or equity security holder shall be addressed as the
entity or an
authorized agent has directed in its last request filed in the
particular case.
For the purposes of this subdivision:
(A) a
proof of claim filed by a
creditor that designates a mailing address constitutes a filed request
to mail
notices to that address, unless a notice of no dividend has been given
under
Rule 2002(e) and a later notice of possible dividend under Rule 3002(c)
(5) has
not been given; and
(B) a
proof of interest filed by
an equity security holder that designates a mailing address constitutes
a filed
request to mail notices to that address.
(2) If a
creditor or indenture trustee has not
filed a request designating a mailing address under Rule 2002(g) (1) ,
the
notices shall be mailed to the address shown on the list of creditors
or
schedule of liabilities, whichever is filed later. If an equity
security holder
has not filed a request designating a mailing address under Rule
2002(g) (1) ,
the notices shall be mailed to the address shown on the list of equity
security
holders.
(3) If a
list or schedule filed under Rule 1007
includes the name and address of a legal representative of an infant or
incompetent person, and a person other than that representative files a
request
or proof of claim designating a name and mailing address that differs
from the
name and address of the representative included in the list or
schedule, unless
the court orders otherwise, notices under Rule 2002 shall be mailed to
the
representative included in the list or schedules and to the name and
address
designated in the request or proof of claim.
(h)
Notices to creditors whose claims are filed. In a chapter 2 case,
after 90 days after the first date set for the meeting of creditors
under § 308
of Title 31, the court may direct that all notices required by
subdivision (a)
be mailed only to the debtor, the trustee, creditors that hold claims
for which
proofs of claim have been filed, and creditors, if any, that are still
permitted to file claims by reason of an extension granted under Rule
3002(c)
(1) or (c) (2) . In a case where notice of insufficient assets to pay a
dividend
has been given to creditors under subdivision (e) , after 90 days after
the
mailing of a notice of the time for filing claims under Rule 3002(c)
(5) , the
court may direct that notices be mailed only to the entities specified
in the
preceding sentence.
(I)
Notices to committees. Copies of all notices required to be mailed
under this rule shall be mailed to creditors' committees, if any are
formed
(j)
Notices to the Federated States of Micronesia . Copies of notices
required to be mailed to all creditors under this rule shall be mailed.
(1) in a
chapter 3 reorganization case, to the
Registrar of Corporations at any place the Registrar designates, if the
Registrar has filed either a notice of appearance in the case or a
written
request to receive notices;
(2) in a
chapter 3 case, to the FSM Department of
Finance office for the state in which the case is pending; or
(3) if
the papers in the case disclose a debt to
the Federated States of Micronesia other than for taxes, to the
Federated
States of Micronesia Department of Justice and to the Federated States
of
Micronesia department, agency, or instrumentality to which the debtor
became
indebted.
((k)
Notice by publication. The court may order notice by publication if
it finds that notice by mail is impracticable or that it is desirable
to
supplement the notice. Notice by publication may include, but cannot be
limited
to, announcements on the state's radio stations.
((l)
Orders designating matter of notices. The court may from time to
time enter orders designating the matters in respect to which, the
entity to
whom, and the form and manner in which notices shall be sent except as
otherwise provided by these rules.
(m)
Caption. The caption of every notice given under this rule shall
comply with Rule 1005.
Rule
2003. Meeting of Creditors or Equity Security
Holders
(a) Date
and place. In a chapter 2 liquidation or a chapter 3
reorganization case, the receiver or the trustee shall call a meeting
of
creditors to be held no fewer than 20 and no more than 40 days after
the order
for relief. If there is an appeal from or a motion to vacate the order
for
relief, or if there is a motion to dismiss the case, the receiver or
trustee
may set a later date for the meeting. The meeting may be held at a
regular
place for holding court or at any other place designated by the
receiver or
trustee within the state convenient for the interested parties.
(b) Order
of meeting.
(1)
Meeting of creditors. The receiver or trustee
shall preside at the meeting of creditors. The meeting's business shall
include
the examination of the debtor, or in the case of a corporation or
partnership
of the debtor's representative, under oath and, in a chapter 2
liquidation
case, may include the election of a creditors' committee. The trustee
or receiver
shall have the authority to administer oaths.
(2)
Meeting of equity security holders. If the
receiver or trustee convenes a meeting of equity security holders, the
receiver
or trustee shall fix a date for the meeting and shall preside.
(3) Right
to vote. In a chapter 3 case, a creditor
is entitled to vote at a meeting if, at or before the meeting, the
creditor has
filed a proof of claim or a writing setting forth facts evidencing a
right to
vote under § 308(1) of Title 31 unless objection is made to the
claim or the
proof of claim is insufficient on its face. In the event of an
objection to the
amount or allow ability of a claim for the purpose of voting, unless
the court
orders otherwise, the trustee shall tabulate the votes for each
alternative
presented by the dispute and, if resolution of this dispute is
necessary to
determine the result of the election, the tabulations for each
alternative
shall be reported to the court.
(c)
Record of meeting. Any examination under oath at the meeting of
creditors
held under this rule shall be recorded verbatim by using electronic
sound
recording equipment or other means of recording, and the record shall
be
preserved by the receiver or trustee and available for public access
until two
years after the conclusion of the creditors' meeting. Upon any entity's
request, the receiver or trustee shall certify and provide a copy or
transcript
of the recording at the entity's expense.
(d)
Adjournment. The meeting may be adjourned from time to time by
announcement at the meeting of the adjourned date and time without
further
written notice.
(f)
Special meetings .The receiver or trustee may call a special meeting
of creditors on an interested party's request or on the receiver's or
trustee's
own initiative.
(g) Final
meeting. If the receiver or trustee calls a final creditors'
meeting in a case in which the net proceeds realized exceed $1,500, the
clerk
shall mail a summary of the receiver's or trustee's final account to
the
creditors with a notice of the meeting, together with a statement of
the amount
of the claims allowed. The receiver or trustee shall attend the final
meeting
and shall, if requested, report on the administration of the estate.
Rule
2004. Examination
(a)
Examination on motion. On any interested party's motion, the court
may order the examination of any entity.
(b) Scope
of examination. The examination of an entity or of the debtor
under this rule may relate only to the debtor's acts, conduct, or
property or
to the debtor's liabilities and financial condition, or to any matter
which may
affect the administration of the debtor's estate, or to the debtor's
right to a
discharge. In a reorganization case under chapter 3 of Title 31, the
examination may also relate to the operation of any business and the
desirability
of its continuance, the source of any money or property acquired or to
be
acquired by the debtor for purposes of consummating a plan and the
consideration given or offered therefor, and any other matter relevant
to the
case or to the formulation of a plan.
(c)
Compelling attendance and production of documentary evidence. The
attendance of an entity for examination and for the production of
documents,
whether the examination is to be conducted within or without the state
in which
the case is pending, may be compelled as provided in Rule 9016 for the
attendance of a witness at a hearing or trial.
(d) Time
and place of debtor's examination The court may for cause shown
and on terms as it may impose order the debtor to be examined under
this rule
at any time or place it designates, whether within or without the state
wherein
the case is pending.
Rule
2005. Apprehension and Removal of Debtor to
Compel Attendance for Examination
(a) Order
to compel attendance for examination. On any interested
party's motion supported by an affidavit alleging
(1) that
the debtor's examination is necessary for
the estate's proper administration and that there is reasonable cause
to
believe that the debtor is about to leave or has left the debtor's
residence or
principal place of business to avoid examination, or
(2) that
the debtor has evaded service of a
subpoena or of an order to attend for examination, or
(3) that
the debtor has willfully disobeyed a duly
served subpoena or order to attend for examination, the court may issue
to some
officer authorized by law, an order directing the officer to bring the
debtor
before the court without unnecessary delay. If, after hearing, the
court finds
the allegations to be true, the court shall thereupon cause the debtor
to be
examined forthwith. If necessary, the court shall fix conditions for
further
examination and for the debtor's obedience to all orders made in
reference
thereto.
(b)
Conditions of release. In determining what conditions will
reasonably assure attendance or obedience under subdivision (a) , the
court
shall be governed by the provisions and policies of FSM Criminal
Procedure Rule
46.
Rule
2006. Solicitation and Voting of Proxies in
Chapter 2 Liquidation Cases
(a)
Applicability.This rule applies only in a liquidation case pending
under chapter 2 of Title 31.
(b)
Definitions.
(1)
Proxy. A proxy is a written power of attorney
authorizing any entity to vote the claim or otherwise act as the
owner's
attorney in fact in connection with the administration of the estate.
(2)
Solicitation of proxy. The solicitation of a
proxy is any communication, other than one from an attorney to a
regular client
who owns a claim or from an attorney to the owner of a claim who has
requested
the attorney to represent the owner, by which a creditor is asked,
directly or
indirectly, to give a proxy after or in contemplation of the filing of
an
application by or against the debtor.
(c)
Authorized solicitation.
(1) A
proxy may be solicited only by a creditor
owning an allowable unsecured claim against the estate on the date of
the
application's filing.
(2) A
proxy may be solicited only in writing.
(d)
Solicitation not authorized. This rule does not permit solicitation
(1) in
any interest other than that of general
creditors
(2) by or
on behalf of any custodian;
(3) by or
on behalf of an attorney at law; or
(4) by or
on behalf of a transferee of a claim for
collection only.
(e) Data
required from holders of multiple proxies. At any time before
the voting starts at any creditors' meeting under § 308(1) of
Title 31, or at
any other time as the court may direct, a holder of two or more proxies
shall
file and send to the trustee a verified list of the proxies to be voted
and a
verified statement of the pertinent facts and circumstances in
connection with
the execution and delivery of each proxy, including:
(1) a
copy of the solicitation;
(2)
identification of the solicitor, the forwarder,
if the forwarder is neither the solicitor nor the owner of the claim,
and the
proxyholder, including their connections with the debtor and with each
other.
(3) a
statement that no consideration has been paid
or promised by the proxyholder for the proxy;
(4) a
statement on whether there is any agreement
and, if so, the particulars thereof, between the proxyholder and any
other
entity for the payment of any consideration in connection with voting
the
proxy, or for the sharing of compensation with any entity, or for the
employment of any person as attorney, accountant, appraiser,
auctioneer, or
other employee for the estate;
(5) if
the proxy was solicited by an entity other
than the proxyholder, or forwarded to the holder by an entity who is
neither a
solicitor of the proxy nor the owner of the claim, a statement signed
and
verified by the solicitor or forwarder that no consideration has been
paid or
promised for the proxy, and whether there is any agreement, and, if so,
the
particulars thereof, between the solicitor or forwarder and any other
entity
for the payment of any consideration in connection with voting the
proxy, or for
sharing compensation with any entity, or for the employment of any
person as
attorney, accountant, appraiser, auctioneer, or other employee for the
estate;
(6) if
the solicitor, forwarder, or proxyholder is
a committee, a statement signed and verified by each member about the
amount
and source of any consideration paid or to be paid to the member in
connection
with the case other than by way of dividend on the member's claim.
(f)
Enforcement of restrictions on solicitation. On any interested
party's motion or on its own initiative, the court may determine
whether there
has been a failure to comply with the this rule's provisions or any
other
impropriety in connection with the solicitation or voting of a proxy.
After
notice and a hearing the court may reject any proxy for cause, vacate
any order
entered in consequence of the voting of any proxy which should have
been
rejected, or take any other appropriate action.
Rule
2007. Review of Appointment of Creditors'
Committee Organized Before Case's Start
(a)
Applicability. Motion to review appointment.
If a
committee consists of the members organized by creditors before the
start of a chapter 3 case, on an interested party's motion and after a
hearing
on notice to entities as the court may direct, the court may determine
whether
the appointment of the committee is satisfactory.
(b)
Selection of members of committee. The court may find that a
committee organized by unsecured creditors before the start of a
chapter 3 case
was fairly chosen if:
(1) it
was selected by a majority in number and
amount of claims of unsecured creditors who may vote under §
308(1) of Title 31
and were present in person or represented at a meeting of which all
creditors
having unsecured claims of over $1,000 or the 100 unsecured creditors
having
the largest claims had at least five days notice in writing, and of
which
meeting written minutes reporting the names of the creditors present or
represented and voting and the amounts of their claims were kept and
are
available for inspection;
(2) all
proxies voted at the meeting for the
elected committee were solicited under Rule 2006 and the lists and
statements
required by subdivision (e) thereof have been sent to the trustee; and
(3) the
organization of the committee was in all
other respects fair and proper.
(c)
Failure to comply with requirements for appointment. After a hearing
on notice under subdivision (a) , the court shall direct the trustee to
vacate
the committee's appointment and may order other appropriate action if
the court
finds that the appointment was not satisfactory.
Rule
2007.1. Appointment of Trustee or Examiner in a
Chapter 3 Reorganization Case Order to appoint trustee or examiner. In
a
chapter 3 reorganization case, a motion for an order to appoint an
examiner or
a trustee under § 302 of Title 31 shall be made in accordance with
Rule 9014.
Rule
2008. Notice to Receiver or Trustee of Selection
The court
shall immediately notify the person selected as trustee how to
qualify and, if applicable, the amount of the receiver's or trustee's
bond. A
trustee that has filed a blanket bond under Rule 2010 and has been
selected as
receiver in a chapter 2 case that does not notify the court in writing
of
rejection of the office within five days after receipt of notice of
selection
shall be deemed to have accepted the office. Any other person selected
as
trustee shall notify the court in writing of acceptance of the office
within
five days after receipt of notice of selection or shall be deemed to
have
rejected the office.
Rule
2009. Receivers or Trustees for Estates When
Joint Administration Ordered
(a)
Selection of single trustee for estates being jointly administered.
If the court orders a joint administration of two or more estates under
Rule
1015(b) , it may appoint a single receiver or trustee for the estates
being
jointly administered.
(b)
Appointment of receivers or trustees for estates being jointly
administered.
(1)
Chapter 2 liquidation cases. The court may appoint one or more
interim receivers for estates being jointly administered in chapter 2
cases.
(2)
Chapter 3 reorganization cases. If the appointment of a trustee is
ordered, the court may appoint one or more trustees for estates being
jointly
administered in chapter 3 cases.
(c)
Potential conflicts of interest. On a showing that creditors or
equity security holders of the different estates will be prejudiced by
conflicts of interest of a common receiver or trustee who has been
appointed,
the court shall order the selection of separate receivers or trustees
for estates
being jointly administered.
(d)
Separate accounts.The receiver or receivers or trustee or trustees
of estates being jointly administered shall keep separate accounts of
the
property and distribution of each estate.
Rule
2010. Qualification by Receiver or Trustee;
Proceeding on Bond
(a)
Blanket bond. A blanket bond may be authorized in favor of the
Federated States of Micronesia conditioned on the faithful performance
of the
receiver's or trustee's official duties to cover (1) a person who
qualifies as
trustee in a number of cases, and (2) a number of receivers or trustees
each of
whom qualifies in a different case.
(b)
Proceeding on bond. A proceeding on the trustee's bond may be
brought by any interested party in the name of the Federated States of
Micronesia
for the use of the entity injured by the breach of the condition.
Rule
2011. Evidence of Debtor in Possession or
Qualification of Trustee
(a)
Whenever evidence is required that a debtor is a debtor in
possession or that a trustee has qualified, the clerk may so certify
and the
certificate shall constitute conclusive evidence of that fact.
(b) If a
person appointed as trustee does not qualify within seven days
of appointment, the clerk shall so notify the court.
Rule
2012. Substitution of Receiver or Trustee;
Successor; Accounting
(a)
Trustee. If a trustee is appointed in a chapter 3 case or the debtor
is removed as debtor in possession, the trustee is substituted
automatically
for the debtor in possession as a party in any pending action,
proceeding, or
matter.
(b)
Successor receiver or trustee. When a receiver or trustee dies,
resigns, is removed, or otherwise ceases to hold office during the
pendency of
a case under Title 31
(1) the
successor is automatically substituted as a
party in any pending action, proceeding, or matter; and
(2) the
successor receiver or trustee shall
prepare, file, and send to the court an accounting of the estate's
prior
administration.
Rule
2013. Public Record of Compensation Awarded to
Trustees and Receivers, Examiners, and Professionals
(a)
Record to be kept. The clerk shall maintain a public record listing
fees awarded by the court (1) to trustees and receivers and attorneys,
accountants, appraisers, auctioneers and other professionals employed
by
trustees, and (2) to examiners. The record shall include the name and
docket
number of the case, the name of the individual or firm receiving the
fee and
the amount of the fee awarded. The record shall be maintained
chronologically
and shall be kept current and open to examination by the public without
charge.
"Trustees," as used in this rule, does not include debtors in
possession.
(b)
Summary of record. At the close of each annual period, the clerk
shall prepare a summary of the public record by individual or firm
name, to reflect
total fees awarded during the preceding year. The summary shall be open
to
examination by the public without charge.
Rule
2014. Employment of Professional Persons
(a)
Application for an order of employment. An order approving the
employment of attorneys, accountants, appraisers, auctioneers, agents,
or other
professionals under § 111 of Title 31 shall be made only on
application of the
debtor, receiver, or trustee. The application shall be filed. The
application
shall state the specific facts showing the necessity for the
employment, the
name of the person to be employed, the reasons for the selection, the
professional services to be rendered, any proposed arrangement for
compensation, and, to the best of the applicant's knowledge, all of the
person's connections with the debtor, creditors, any other interested
party,
and their respective attorneys and accountants. The application shall
be
accompanied by a verified statement of the person to be employed
setting forth
the person's connections with the debtor, creditors, any other
interested
party, and their respective attorneys and accountants.
(b)
Services rendered by member or associate of firm of attorneys or
accountants. If, under Title 31 and this rule, a law partnership or
corporation
is employed as an attorney, or an accounting partnership or corporation
is
employed as an accountant, or if a named attorney or accountant is
employed,
any partner, member, or regular associate of the partnership,
corporation or
individual may act as attorney or accountant so employed, without
further court
order.
Rule
2015. Duty to Keep Records, Make Reports, and
Give Notice of Case
(a)
Receiver, trustee, or debtor in possession. A receiver, trustee, or
debtor in possession shall
(1) in a
chapter 2 liquidation case and, if the
court directs, in a chapter 3 reorganization case file a complete
inventory of
the debtor's property within 30 days after qualifying as a trustee or
debtor in
possession, unless such an inventory has already been filed;
(2) keep
a record of receipts and the disposition
of money and property received;
(3) file
the reports and summaries required by FSM
income and social security tax laws, which shall include a statement,
if
payments are made to employees, of the amounts of deductions for all
taxes
required to be withheld or paid for and on behalf of employees and the
place
where these amounts are deposited;
(4) as
soon as possible after the case's start,
give notice of the case to every entity known to be holding money or
property
subject to the debtor's withdrawal or order, including every bank,
credit
union, public utility company, and landlord with whom the debtor has a
deposit,
and to every insurance company which has issued a policy having a cash
surrender value payable to the debtor, but notice need not be given to
any
entity who has knowledge or has previously been notified of the case;
(5) in a
chapter 3 reorganization case, on or
before the last day of the month after each calendar quarter during
which there
is a duty to pay fees under Rule 1006, file a statement of any
disbursements
made during such calendar that quarter and of any fees payable under
Rule 1006
for that quarter.
(b)
Transmission of reports. In a chapter 3 case the court may direct
that copies or summaries of annual reports and copies or summaries of
other
reports be mailed to the creditors, equity security holders, and
indenture
trustees.
Rule
2016. Compensation for Services Rendered and
Reimbursement of Expenses
(a)
Application for compensation or reimbursement. An entity seeking
interim or final compensation for services, or reimbursement of
necessary
expenses, from the estate shall file an application setting forth a
detailed
statement of the services rendered, time expended and expenses
incurred, and
the amounts requested. An application for compensation shall include
(1) a
statement about what payments have
theretofore been made or promised to the applicant for services
rendered or to
be rendered in any capacity whatsoever in connection with the case,
(2) the
source of the compensation so paid or
promised,
(3)
whether any compensation previously received
has been shared,
(4)
whether an agreement or understanding exists
between the applicant and any other entity for the sharing of
compensation received
or to be received for services rendered in or in connection with the
case,
(5) and
the particulars of any sharing of
compensation or agreement or understanding therefore, but details of
any
agreement by the applicant for the sharing of compensation as a member
or
regular associate of a firm of lawyers or accountants shall not be
required.
This
subdivision's requirements shall apply to an application for an
attorney's or accountant's compensation for services rendered even
though the
application is filed by a creditor or other entity.
(b)
Disclosure of compensation paid or promised to debtor's attorney.
Every attorney for a debtor in a Title 31 case, whether or not the
attorney
applies for compensation, shall file within 15 days after the order for
relief,
or at another time as the court may direct, a statement of the
compensation
paid to or agreed to be paid, if the payment or agreement was made
within one
year before the bankruptcy application was filed, for services rendered
or to
be rendered in contemplation of or in connection with the Title 31
case. It
shall include whether the attorney has shared or agreed to share the
compensation with any other entity. The statement shall include the
particulars
of any such sharing or agreement to share by the attorney, but the
details of
any agreement for the sharing of the compensation with a member or
regular
associate of the attorney's law firm shall not be required. A
supplemental
statement shall be filed within 15 days after any payment or agreement
not previously
disclosed.
(c)
Disclosure of compensation paid or promised to bankruptcy
application preparer. Every bankruptcy application preparer for a
debtor shall
file a sworn declaration under § 104(3) of Title 31 within 10 days
after the
application's filing date, or at another time as the court may direct.
The
declaration must disclose any fee, and the source of any fee, received
from or
on the debtor's behalf within 12 months of the case's filing and all
unpaid
fees charged to the debtor. The declaration must describe the services
performed and documents prepared or caused to be prepared by the
bankruptcy
application preparer. A supplemental statement shall be filed within 10
days
after any payment or agreement not previously disclosed.
Rule
2017. Examination of Debtor's Transactions with
Debtor's Attorney
(a)
Payment or transfer to attorney before order for relief. On any
interested party's motion or on the court's own initiative, the court,
after
notice and a hearing, may determine whether any payment of money or any
transfer of property by the debtor, made directly or indirectly and in
contemplation of the filing of an application under Title 31 by or
against the
debtor or before entry of the order for relief in an involuntary case,
to an
attorney for services rendered or to be rendered is excessive.
(b)
Payment or transfer to attorney after order for relief. On the
debtor's, receiver's, or trustee's motion or on the court's own
initiative, the
court, after notice and a hearing, may determine whether any payment of
money
or any transfer of property, or any agreement therefore, by the debtor
to an
attorney after entry of an order for relief in a Title 31 case is
excessive,
whether the payment or transfer is made or is to be made directly or
indirectly, if the payment, transfer, or agreement therefore is for
services in
any way related to the case.
Rule
2018. Intervention; Right to Be Heard
(a)
Permissive intervention. In a case under Title 31, after hearing on
such notice as the court directs and for cause shown, the court may
permit any
interested entity to intervene generally or with respect to any
specified
matter.
(b)
Intervention by Attorney General of a State. The Attorney General of
a State may appear and be heard on behalf of consumer creditors if the
court
determines the appearance is in the public interest, but the Attorney
General
may not appeal from any judgment, order, or decree in the case.
(c)
Service on entities covered by this rule. The court may enter orders
governing the service of notice and papers on entities permitted to
intervene
or be heard under this rule.
Rule
2019. Representation of Creditors and Equity
Security Holders in Chapter 3 Reorganization Cases
(a) Data
required. In a chapter 3 reorganization case, every entity or committee
representing more than one creditor or equity security holder, unless
otherwise
directed by the court, shall file a verified statement setting forth:
(1) the
name and address of the creditor or equity
security holder;
(2) the
nature and amount of the claim or interest
and the time of acquisition thereof unless it is alleged to have been
acquired
more than one year before the application's filing;
(3) a
recital of the pertinent facts and
circumstances in connection with the employment of the entity, and, in
the case
of a committee, the name or names of the entity or entities at whose
instance,
directly or indirectly, the employment was arranged or the committee
was
organized or agreed to act; and
(4) with
reference to the time of the employment of
the entity, the organization or formation of the committee, or the
appearance
in the case of any indenture trustee, the amounts of claims or
interests owned
by the entity, the committee members or the indenture trustee, the
times when
acquired, the amounts paid therefore, and any sales or other
disposition
thereof. The statement shall include a copy of the instrument, if any,
whereby
the entity, committee, or indenture trustee is empowered to act on
behalf of
creditors or equity security holders. A supplemental statement shall be
filed
promptly, setting forth any material changes in the facts contained in
the
statement filed under this subdivision.
(b)
Failure to comply; effect. On any interested party's motion or on
its own initiative, the court may
(1)
determine whether there has been a failure to
comply with subdivision (a) or with any other applicable law regulating
the
activities and personnel of any entity or committee or any other
impropriety in
connection with any solicitation and, if it so determines, the court
may refuse
to permit that entity or committee to be heard further or to intervene
in the
case;
(2)
examine any representation provision of a
deposit agreement, proxy, trust mortgage, trust indenture, or deed of
trust, or
committee or other authorization, and any claim or interest acquired by
any
entity or committee in contemplation or in the course of a Title 31
case and
grant appropriate relief; and
(3) hold
invalid any authority, acceptance,
rejection, or objection given, procured, or received by an entity who
has not
complied with this rule or with Rule 1007.
PART III.
CLAIMS AND DISTRIBUTION TO CREDITORS AND EQUITY INTEREST HOLDERS; PLANS
Rule
3001. Proof of Claim
(a) Form
and content. A proof of claim is a written statement setting
forth a creditor's claim. A proof of claim shall conform substantially
to the
appropriate Official Form.
(b) Who
may execute .A proof of claim shall be executed by the creditor
or the creditor's authorized agent except as provided in Rules 3004 and
3005.
(c) Claim
based on a writing. When a claim, or an interest in the
debtor's property securing the claim, is based on a writing, the
original or a
duplicate shall be filed with the proof of claim. If the writing has
been lost
or destroyed, a statement of the circumstances of the loss or
destruction must
be filed with the claim.
(d)
Evidence of perfection of security interest. If a security interest
in the debtor's property is claimed, the proof of claim shall be
accompanied by
evidence that the security interest has been perfected.
(e)
Transferred claim.
(1)
Transfer of claim other than for security
before proof filed. If a claim has been transferred other than for
security
before proof of the claim has been filed, the proof of claim may be
filed only
by the transferee or an indenture trustee.
(2)
Transfer of claim other than for security after
proof filed. If a claim other than one based on a publicly traded note,
bond,
or debenture has been transferred other than for security after the
proof of claim
has been filed, evidence of the transfer shall be filed by the
transferee. The
clerk shall immediately notify the alleged transferor by mail of the
filing of
the evidence of transfer and that objection thereto, if any, must be
filed
within 20 days of the mailing of the notice or within any additional
time
allowed by the court. If the alleged transferor files a timely
objection and
the court finds, after notice and a hearing, that the claim has been
transferred other than for security, it shall enter an order
substituting the
transferee for the transferor. If a timely objection is not filed by
the
alleged transferor, the transferee shall be substituted for the
transferor.
(3)
Transfer of claim for security before proof
filed. If a claim other than one based on a publicly traded note, bond,
or
debenture has been transferred for security before proof of the claim
has been
filed, the transferor or transferee or both may file a proof of claim
for the
full amount. The proof shall be supported by a statement setting forth
the
terms of the transfer. If either the transferor or the transferee files
a proof
of claim, the clerk shall immediately notify the other by mail of the
right to
join in the filed claim. If both transferor and transferee file proofs
of the same
claim, the proofs shall be consolidated. If the transferor or
transferee does
not file an agreement regarding its relative rights respecting voting
of the
claim, payment of dividends thereon, or participation in the
administration of
the estate, on motion by an interested party and after notice and a
hearing,
the court shall enter such orders respecting these matters as may be
appropriate.
(4)
Transfer of claim for security after proof
filed. If a claim other than one based on a publicly traded note, bond,
or
debenture has been transferred for security after the proof of claim
has been
filed, evidence of the terms of the transfer shall be filed by the
transferee.
The clerk shall immediately notify the alleged transferor by mail of
the filing
of the evidence of transfer and that objection thereto, if any, must be
filed
within 20 days of the mailing of the notice or within any additional
time
allowed by the court. If a timely objection is filed by the alleged
transferor,
the court, after notice and a hearing, shall determine whether the
claim has
been transferred for security. If the transferor or transferee does not
file an
agreement regarding its relative rights respecting voting of the claim,
payment
of dividends thereon, or participation in the administration of the
estate, on
motion by an interested party and after notice and a hearing, the court
shall
enter such orders respecting these matters as may be appropriate.
(5)
Service of objection or motion; notice of
hearing. A copy of an objection filed under paragraph (2) or (4) or a
motion
filed under paragraph (3) or (4) together with a notice of a hearing
shall be
mailed or otherwise delivered to the transferor or transferee,
whichever is
appropriate, at least 30 days before the hearing.
(f)
Evidentiary effect. A proof of claim executed and filed in
accordance with these rules shall constitute prima facie evidence of
the
validity and amount of the claim.
Rule
3002. Filing Proof of Claim or Interest
(a)
Necessity for filing. An unsecured creditor or an equity security
holder must file a proof of claim or interest for the claim or interest
to be
allowed, except as provided in Rules 1019(3) , 3003, 3004, and 3005.
(b) Place
of filing. A proof of claim or interest shall be filed in
accordance with Rule 5005.
(c) Time
for filing .In a chapter 2 liquidation case, a proof of claim
is timely filed if it is filed not later than 180 days after the date
of the
order for relief except as follows:
(1) On a
governmental unit's motion before the
expiration of this period and for cause shown, the court may extend the
time
for the governmental unit to file a claim.
(2) In
the interest of justice and if it will not
unduly delay the administration of the case, the court may extend the
time for
filing a proof of claim by an infant or incompetent person or the
representative of either.
(3) An
unsecured claim which arises in favor of an
entity or becomes allowable as a result of a judgment may be filed
within 30
days after the judgment becomes final if the judgment is for the
recovery of
money or property from that entity or denies or avoids the entity's
interest in
property. If the judgment imposes a liability which is not satisfied,
or a duty
which is not performed within this period or such further time as the
court may
permit, the claim shall not be allowed.
(4) A
claim arising from the rejection of an
executory contract or unexpired lease of the debtor may be filed within
such
time as the court may direct.
(5) If
notice of insufficient assets to pay a
dividend was given to creditors under Rule 2002(e) , and subsequently
the
receiver notifies the court that payment of a dividend appears
possible, the
clerk shall notify the creditors of that fact and that they may file
proofs of
claim within 90 days after the mailing of the notice.
Rule
3003. Filing Proof of Claim or Equity Security
Interest in Chapter 3 Reorganization Cases
(a)
Applicability of rule. This rule applies in chapter 3 cases.
(b)
Schedule of liabilities and list of equity security holders.
(1)
Schedule of liabilities. The schedule of
liabilities filed under § 104(3) of Title 31 shall constitute
prima facie
evidence of the validity and amount of the claims of creditors, unless
they are
scheduled as disputed, contingent, or unliquidated. It shall not be
necessary
for a creditor or equity security holder to file a proof of claim or
interest
except as provided in subdivision (c) (2) .
(2) List
of equity security holders. The list of
equity security holders filed under Rule 1007(a) (3) shall constitute
prima
facie evidence of the validity and amount of the equity security
interests and
it shall not be necessary for the holders of these interests to file a
proof of
interest.
(c)
Filing proof of claim.
(1) Who
may file. Any creditor or indenture trustee
may file a proof of claim within the time prescribed by subdivision (c)
(3) .
(2) Who
must file. Any creditor or equity security
holder whose claim or interest is not scheduled or scheduled as
disputed,
contingent, or unliquidated shall file a proof of claim or interest
within the
time prescribed by subdivision (c) (3) ; any creditor who fails to do
so shall
not be treated as a creditor with respect to the claim for the purposes
of
voting and distribution.
(3) Time
for filing. The court shall fix and for
cause shown may extend the time within which proofs of claim or
interest may be
filed. Notwithstanding the expiration of such time, a proof of claim
may be
filed to the extent and under the conditions stated in Rule 3002(c) (2)
, (c)
(3) , and (c) (4) .
(4)
Effect of filing claim or interest. A proof of
claim or interest executed and filed in accordance with this
subdivision shall
supersede any scheduling of that claim or interest under § 104(3)
of Title 31.
(d) Proof
of right to record status. For the purposes of Rules 3017,
3018 and 3021 and for receiving notices, an entity who is not the
record holder
of a security may file a statement setting forth facts which entitle
that
entity to be treated as the record holder. Any interested party may
file an
objection to the statement.
Rule
3004. Filing of Claims by Debtor or Receiver or
Trustee
If a
creditor fails to file a proof of claim, the debtor or receiver or
trustee may do so in the creditor's name within 30 days after
expiration of the
time for filing claims prescribed by Rule 3002(c) if applicable. The
clerk
shall forthwith mail notice of the filing to the creditor, the debtor
and the
receiver or trustee. A proof of claim filed by a creditor under Rule
3002 or
Rule 3003(c) , shall supersede the proof filed by the debtor or
receiver or
trustee.
Rule
3005. Filing of Claim, Acceptance, or Rejection
By Guarantor, Surety, Indorser, or Other Co-debtor
(a)
Filing of claim. If a creditor has not filed a proof of claim under
Rule 3002 or 3003(c) , an entity that is or may be liable with the
debtor to
that creditor, or who has secured that creditor, may, within 30 days
after the
expiration of the time for filing claims prescribed by Rule 3002(c) or
3003(c)
whichever is applicable, execute and file a proof of claim in the name
of the
creditor, if known, or if unknown, in the entity's own name. No
distribution
shall be made on the claim except on satisfactory proof that the
original debt
will be diminished by the amount of distribution. A proof of claim
filed by a
creditor under Rule 3002 or Rule 3003(c) shall supersede the proof of
claim
filed under the first sentence of this subdivision.
(b)
Filing of acceptance or rejection; substitution of creditor.An
entity which has filed a claim under the first sentence of subdivision
(a) may
file an acceptance or rejection of a plan in the creditor's name, if
known, or
if unknown, in the entity's own name but if the creditor files a proof
of claim
within the time permitted by Rule 3003(c) or files a notice before
confirmation
of a plan of the creditor's intention to act in the creditor's own
behalf, the
creditor shall be substituted for the obligor with respect to that
claim.
Rule
3006. Withdrawal of Claim; Effect on Acceptance
or Rejection of Plan.
A
creditor may withdraw a claim as of right by filing a notice of
withdrawal, except as provided in this rule. If after a creditor has
filed a
proof of claim, an objection is filed thereto or a complaint is filed
against
that creditor in an adversary proceeding, or the creditor has accepted
or
rejected the plan or otherwise has participated significantly in the
case, the
creditor may not withdraw the claim except on order of the court after
a
hearing on notice to the receiver, trustee, or debtor in possession.
The court
order shall contain such terms and conditions as the court deems
proper. Unless
the court orders otherwise, an authorized withdrawal of a claim shall
constitute withdrawal of any related acceptance or rejection of a plan.
Rule
3007. Objections to Claims
An
objection to the allowance of a claim shall be in writing and filed.
A copy of the objection with notice of the hearing thereon shall be
mailed or
otherwise delivered to the claimant, the debtor or debtor in possession
and the
receiver or trustee at least 30 days before the hearing. If an
objection to a
claim is joined with a demand for relief of the kind specified in Rule
7001, it
becomes an adversary proceeding.
Rule
3008. Reconsideration of Claims
An
interested party may move for reconsideration of an order allowing or
disallowing a claim against the estate. The court after a hearing on
notice
shall enter an appropriate order.
Rule
3009. Declaration and Payment of Dividends in a
Chapter 2 Liquidation Case
In a
chapter 2 case, dividends to creditors shall be paid as promptly as
practicable. Dividend checks shall be made payable to and mailed to
each
creditor whose claim has been allowed, unless a power of attorney
authorizing
another entity to receive dividends has been executed and filed in
accordance
with Rule 9010. In that event, dividend checks shall be made payable to
the
creditor and to the other entity and shall be mailed to the other
entity.
Rule
3010. Small Dividends and Payments in Chapter 2
Liquidation Cases
In a
chapter 2 case no dividend in an amount less than $5 shall be
distributed by the receiver to any creditor unless authorized by court
order.
Any dividend not distributed to a creditor shall be treated as
unclaimed funds.
Rule
3011. Unclaimed Funds in Chapter 2 Liquidation
Cases
The
receiver shall file a list of all known names and addresses of the
entities and the amounts which they are entitled to be paid from
remaining
property of the estate. The unclaimed funds shall be treated as
abandoned
property.
Rule
3012. Valuation of Security
On any
interested party's motion and after a hearing on notice to the
holder of the secured claim and any other entity as the court may
direct, the
court may determine the value of a claim secured by a lien on property
in which
the estate has an interest.
Rule
3013. Classification of Claims and Interests
For the
purposes of the plan and its acceptance, the court may, on
motion after hearing on notice as the court may direct, determine
classes of
creditors and equity security holders.
Rule
3016. Filing of Plan and Disclosure Statement in
a Chapter 3 Reorganization Case
(a)
Identification of plan. Every proposed plan and any modification
thereof shall be dated and identified with the name of the entity or
entities
submitting or filing it.
(b)
Disclosure statement. In a chapter 3 case, a disclosure statement or
evidence showing compliance with § 104(3) of Title 31 shall be
filed with the
plan or within a time fixed by the court.
(c)
Injunction Under a Plan. If a plan provides for an injunction
against conduct not otherwise enjoined under Title 31, the plan and
disclosure
statement shall describe in specific and conspicuous language (bold,
italic, or
underlined text) all acts to be enjoined and identify the entities that
would
be subject to the injunction.
Rule
3017. Court Consideration of Disclosure Statement
in a Chapter 3 Reorganization Case
(a)
Hearing on disclosure statement and objections. Except as provided
in Rule 3017.1, after a disclosure statement is filed in accordance
with Rule
3016(b) , the court shall hold a hearing on at least 25 days' notice to
the
debtor, creditors, equity security holders and other interested parties
as
provided in Rule 2002 to consider the disclosure statement and any
objections
or modifications thereto. The plan and the disclosure statement shall
be mailed
with the notice of the hearing only to the debtor, any trustee under
Title 31,
and any interested party who requests in writing a copy of the
statement or
plan. Objections to the disclosure statement shall be filed and served
on the
debtor, the trustee under Title 31, and any other entity designated by
the
court, at any time before the disclosure statement is approved or by an
earlier
date as the court may fix.
Court
Consideration of Disclosure Statement in a Chapter 3 Reorganization
Case
(b)
Determination on disclosure statement After the hearing the court
shall determine whether the disclosure statement should be approved.
(c) Dates
fixed for voting on plan and confirmation. On or before the
disclosure statement's approval, the court shall fix a time within
which the
holders of claims and interests may accept or reject the plan and may
fix a
date for the hearing on confirmation.
(d)
Transmission and notice to creditors and equity security holders
Upon approval of a disclosure statement, except to the extent that the
court
orders otherwise with respect to one or more unimpaired classes of
creditors or
equity security holders the debtor in possession, trustee, proponent of
the
plan, or clerk as the court orders shall mail to all creditors and
equity
security holders,
(1) the
plan or a court-approved summary of the
plan;
(2) the
disclosure statement approved by the court;
(3)
notice of the time within which acceptances and
rejections of the plan may be filed; and
(4) any
other information as the court may direct,
including any court opinion approving the disclosure statement or a
court-approved summary of the opinion. In addition, notice of the time
fixed
for filing objections and the hearing on confirmation shall be mailed
to all
creditors and equity security holders in accordance with Rule 2002(b) ,
and a
form of ballot conforming to the appropriate Official Form shall be
mailed to
creditors and equity security holders entitled to vote on the plan. If
the
court opinion is not sent or only a summary of the plan is sent, the
court
opinion or the plan shall be provided on an interested party's request
at the
plan proponent's expense. If the court orders that the disclosure
statement and
the plan or a summary of the plan shall not be mailed to any unimpaired
class,
notice that the class is designated in the plan as unimpaired and
notice of the
name and address of the person from whom the plan or summary of the
plan and
disclosure statement may be obtained upon request and at the plan
proponent's
expense, shall be mailed to members of the unimpaired class together
with the
notice of the time fixed for filing objections to and the hearing on
confirmation. For the purposes of this subdivision, creditors and
equity
security holders shall include holders of stock, bonds, debentures,
notes, and
other securities of record on the date the order approving the
disclosure
statement is entered or another date fixed by the court, for cause,
after
notice and a hearing.
(e)
Transmission to beneficial holders of securities At the hearing held
under subdivision (a) , the court shall consider the procedures for
sending the
documents and information required by subdivision (d) to beneficial
holders of
stock, bonds, debentures, notes, and other securities, determine the
adequacy
of the procedures, and enter any orders the court deems appropriate.
(f)
Notice and Transmission of Documents to Entities Subject to an
Injunction Under a Plan If a plan provides for an injunction against
conduct
not otherwise enjoined under Title 31 and an entity that would be
subject to
the injunction is not a creditor or equity security holder, at the
hearing held
under Rule 3017(a) , the court shall consider procedures for providing
the
entity with:
(1) at
least 25 days' notice of the time fixed for
filing objections and the hearing on confirmation of the plan
containing the
information described in Rule 2002(c) (3) ; and
(2) to
the extent feasible, a copy of the plan and
disclosure statement.
Rule
3017.1. Court Consideration of Disclosure
Statement
(a)
Conditional approval of disclosure statement. The court may, on the
plan proponent's application, conditionally approve a disclosure
statement
filed in accordance with Rule 3016(b) . On or before conditional
approval of
the disclosure statement, the court shall:
(1) fix a
time within which the holders of claims
and interests may accept or reject the plan;
(2) fix a
time for filing objections to the
disclosure statement;
(3) fix a
date for the hearing on final approval of
the disclosure statement to be held if a timely objection is filed; and
(4) fix a
date for the hearing on confirmation.
(b)
Application of Rule 3017. Rule 3017(a) , (b) , (c) , and (e) do not
apply to a conditionally approved disclosure statement. Rule 3017(d)
applies to
a conditionally approved disclosure statement, but conditional approval
is
considered approval of the disclosure statement for the purpose of
applying
Rule 3017(d) .
(c) Final
approval.
(1)
Notice. Notice of the time fixed for filing
objections and the hearing to consider final approval of the disclosure
statement shall be given in accordance with Rule 2002 and may be
combined with
notice of the hearing on confirmation of the plan.
(2)
Objections. Objections to the disclosure
statement shall be filed and served on the debtor, the trustee, any
committee
appointed under Title 31, and any other entity designated by the court
at any
time before final approval of the disclosure statement or by an earlier
date as
the court may fix.
(3)
Hearing. If a timely objection to the
disclosure statement is filed, the court shall hold a hearing to
consider final
approval before or combined with the hearing on confirmation of the
plan.
Rule
3018. Acceptance or Rejection of Plan in a
Chapter 3 Reorganization Case
(a)
Entities entitled to accept or reject plan; time for acceptance or
rejection. A plan may be accepted or rejected in accordance with §
308 of Title
31 within the time fixed by the court under Rule 3017. Subject to
subdivision
(b) , an equity security holder or creditor whose claim is based on a
security
of record shall not be entitled to accept or reject a plan unless the
equity
security holder or creditor is the holder of record of the security on
the date
the order approving the disclosure statement is entered or on another
date
fixed by the court, for cause, after notice and a hearing. For cause
shown, the
court after notice and hearing may permit a creditor or equity security
holder
to change or withdraw an acceptance or rejection. Notwithstanding
objection to
a claim or interest, the court after notice and hearing may temporarily
allow
the claim or interest in an amount which the court deems proper for the
purpose
of accepting or rejecting a plan.
(b)
Acceptances or rejections obtained before application. An equity
security holder or creditor whose claim is based on a security of
record who
accepted or rejected the plan before the start of the case shall not be
deemed
to have accepted or rejected the plan unless the equity security holder
or
creditor was the holder of record of the security on the date specified
in the
solicitation of the acceptance or rejection for the purposes of the
solicitation. A holder of a claim or interest who has accepted or
rejected a
plan before the start of the case under Title 31 shall not be deemed to
have
accepted or rejected the plan if the court finds after notice and
hearing that
the plan was not sent to substantially all creditors and equity
security
holders of the same class, that an unreasonably short time was
prescribed for
the creditors and equity security holders to accept or reject the plan.
(c) Form
of acceptance or rejection. An acceptance or rejection shall be
in writing, identify the plan or plans accepted or rejected, be signed
by the
creditor or equity security holder or an authorized agent, and conform
to the
appropriate Official Form. If more than one plan is sent under Rule
3017, an
acceptance or rejection may be filed by each creditor or equity
security holder
for any number of plans sent and if acceptances are filed for more than
one
plan, the creditor or equity security holder may indicate a preference
or
preferences among the plans so accepted.
(d)
Acceptance or rejection by partially secured creditor. A creditor
whose claim has been allowed in part as a secured claim and in part as
an
unsecured claim shall be entitled to accept or reject a plan in both
capacities.
Rule
3019. Modification of Accepted Plan Before
Confirmation in a Chapter 3 Reorganization Case
In a
chapter 3 case, after a plan has been accepted and before its
confirmation, the proponent may file a modification of the plan. If the
court
finds after hearing on notice to the trustee, the creditors, and any
other
entity designated by the court that the proposed modification does not
adversely change the treatment of the claim of any creditor or the
interest of
any equity security holder who has not accepted in writing the
modification, it
shall be deemed accepted by all creditors and equity security holders
who have
previously accepted the plan.
Rule
3020. Deposit; Confirmation of Plan in a Chapter
3 Reorganization Case
(a)
Deposit. In a chapter 3 case, before entry of the order confirming
the plan, the court may order the deposit with the trustee or debtor in
possession
of the consideration required by the plan to be distributed on
confirmation.
Any money deposited shall be kept in a special account established for
the
exclusive purpose of making the distribution.
(b)
Objection to and hearing on confirmation in a Chapter 3 case.
(1)
Objection. An objection to confirmation of the
plan shall be filed and served on the debtor, the trustee, the
proponent of the
plan, any committee appointed under Title 31, and any other entity
designated
by the court, within a time fixed by the court. A copy of every
objection to
confirmation shall be sent by the objecting party to the trustee within
the
time fixed for filing objections. An objection to confirmation is
governed by
Rule 9014.
(2)
Hearing. The court shall rule on confirmation
of the plan after notice and hearing as provided in Rule 2002. If no
objection
is timely filed, the court may determine that the plan has been
proposed in
good faith and not by any means forbidden by law without receiving
evidence on
these issues.
(c) Order
of confirmation.
(1) The
order of confirmation shall conform to the
appropriate Official Form. If the plan provides for an injunction
against
conduct not otherwise enjoined under Title 31, the order of
confirmation shall
(1) describe in reasonable detail all acts enjoined; (2) be specific in
its
terms regarding the injunction; and (3) identify the entities subject
to the
injunction.
(2)
Notice of entry of the order of confirmation
shall be mailed promptly to the debtor, the trustee, creditors, equity
security
holders, other interested parties, and, if known, to any identified
entity
subject to an injunction provided for in the plan against conduct not
otherwise
enjoined under Title 31.
(d)
Retained power.Notwithstanding the entry of the order of confirmation,
the court may issue any other order necessary to administer the estate.
Rule
3021. Distribution Under Plan
After
confirmation of a plan, distribution shall be made to creditors
whose claims have been allowed, to interest holders whose interests
have not
been disallowed, and to indenture trustees who have filed claims under
Rule
3003(c) (5) that have been allowed. For the purpose of this rule,
creditors
include holders of bonds, debentures, notes, and other debt securities,
and
interest holders include the holders of stock and other equity
securities, of
record at the time of start of distribution unless a different time is
fixed by
the plan or the order confirming the plan.
Rule
3022. Final Decree in Chapter 3 Reorganization
Case
After
confirmation of a plan, distribution shall be made to creditors
whose claims have been allowed, to interest holders whose interests
have not
been disallowed, and to indenture trustees who have filed claims under
Rule
3003(c) (5) that have been allowed. For the purpose of this rule,
creditors
include holders of bonds, debentures, notes, and other debt securities,
and
interest holders include the holders of stock and other equity
securities, of
record at the time of start of distribution unless a different time is
fixed by
the plan or the order confirming the plan.
PART IV.
THE DEBTOR: DUTIES AND BENEFITS
Rule
4001. Relief from Automatic Stay; Prohibiting or
Conditioning the Use, Sale , or
Lease of
Property; Use of Cash Collateral; Obtaining Credit; Agreements
(a)
Relief from stay; prohibiting or conditioning the use, sale, or
lease of property.
(1)
Motion. A motion for relief from an automatic
stay provided by Title 31 or a motion to prohibit or condition the use,
sale,
or lease of property under § 202(1) (a) shall be made in
accordance with Rule
9014 and, if the case is a chapter 3 reorganization case, on the
creditors
included on the list filed under Rule 1007(d) , and on other entities
as the
court may direct.
(2) Ex
parte relief. Relief from a stay under § 106(1)
or a request to prohibit or condition the use, sale, or lease of
property under
§ 202(1) (a) may be granted without prior notice only if
(A) it
clearly appears from
specific facts shown by affidavit or by a verified motion that
immediate and
irreparable injury, loss, or damage will result to the movant before
the
adverse party or the adverse party's attorney can be heard in
opposition, and
(B) the
movant's attorney
certifies to the court in writing the efforts, if any, which have been
made to
give notice and the reasons why notice should not be required.
The party
obtaining relief under this subdivision
and § 106(4) of Title 31 shall immediately give oral notice
thereof to the
receiver, trustee, or debtor in possession and to the debtor and
forthwith mail
or otherwise send to such adverse party or parties a copy of the order
granting
relief. On two days notice to the party who obtained relief from the
stay
without notice or on shorter notice to that party as the court may
prescribe,
the adverse party may appear and move for the stay's reinstatement or
reconsideration of the order prohibiting or conditioning the use, sale,
or
lease of property. In that event, the court shall proceed expeditiously
to hear
and determine the motion.
(b) Use
of cash collateral.
(1)
Motion; service. A motion for authorization to
use cash collateral shall be made in accordance with Rule 9014 and
shall be
served on any entity which has an interest in the cash collateral, or,
if the
case is a chapter 3 reorganization case, on the creditors included on
the list
filed under Rule 1007(d) , and on other entities as the court may
direct.
(2)
Hearing. The court may start a final hearing on
a motion for authorization to use cash collateral no earlier than 15
days after
service of the motion. If the motion so requests, the court may conduct
a
preliminary hearing before the 15 day period expires, but the court may
authorize the use of only that amount of cash collateral as is
necessary to
avoid immediate and irreparable harm to the estate pending a final
hearing.
(3)
Notice. Notice of hearing under this
subdivision shall be given to the parties on whom service of the motion
is
required by paragraph (1) and to other entities as the court may direct.
(c)
Obtaining credit.
(1)
Motion; service. A motion for authority to
obtain credit shall be made in accordance with Rule 9014 and shall be
served on
the creditors or, if the case is a chapter 3 reorganization case, on
the
creditors included on the list filed under Rule 1007(d) , and on other
entities
as the court may direct. The motion shall be accompanied by a copy of
the
agreement.
(2)
Hearing. The court may start a final hearing on
a motion for authority to obtain credit no earlier than 15 days after
service
of the motion. If the motion so requests, the court may conduct a
hearing
before the 15 day period expires, but the court may authorize the
obtaining of
credit only to the extent necessary to avoid immediate and irreparable
harm to
the estate pending a final hearing.
(3)
Notice. Notice of hearing under this
subdivision shall be given to the parties on whom service of the motion
is
required by paragraph (1) and to other entities as the court may direct.
(d)
Agreement relating to relief from the automatic stay, prohibiting or
conditioning the use, sale, or lease of property, providing adequate
protection, use of cash collateral, and obtaining credit.
(1)
Motion; service. A motion for approval of an
agreement
(A) to
provide adequate
protection,
(B) to
prohibit or condition the
use, sale, or lease of property,
(C) to
modify or terminate the
stay provided for in § 106,
(D) to
use cash collateral, or
(E)
between the debtor and an
entity that has a lien or interest in property of the estate under
which the
entity consents to the creation of a lien senior or equal to the
entity's lien
or interest in the property shall be served on any committee under
§ 308 of
Title 31 or its authorized agent, or, if the case is a chapter 3
reorganization
case, on the creditors included on the list filed under Rule 1007(d) ,
and on
other entities as the court may direct. The motion shall be accompanied
by a
copy of the agreement.
(2)
Objection. Notice of the motion and the time
within which objections may be filed and served on the debtor in
possession or
trustee shall be mailed to the parties on whom service is required by
paragraph
(1) and to other entities as the court may direct. Unless the court
fixes a
different time, objections may be filed within 15 days of the mailing
of
notice.
(3)
Disposition; Hearing. If no objection is filed,
the court may enter an order approving or disapproving the agreement
without
conducting a hearing. If an objection is filed or if the court
determines a
hearing is appropriate, the court shall hold a hearing on no less than
five
days' notice to the objector, the movant, the parties on whom service
is
required by paragraph (1) and other entities as the court may direct.
(4)
Agreement in settlement of motion. The court
may direct that the procedures prescribed in paragraphs (1) , (2) , and
(3) shall
not apply and the agreement may be approved without further notice if
the court
determines that a motion made under subdivisions (a) , (b) , or (c) was
sufficient to afford reasonable notice of the agreement's material
provisions
and opportunity for a hearing.
Rule
4002. Debtor's Duties
In
addition to performing other duties prescribed by Title 31 and rules,
the debtor shall:
(1)
attend and submit to an examination at the
times ordered by the court;
(2)
attend the hearing on a complaint objecting to discharge
and, if called as a witness, testify;
(3)
inform the receiver or trustee immediately in
writing about the location of real property in which the debtor has an
interest
and the name and address of every person holding money or property
subject to the
debtor's withdrawal or order if a schedule of property has not yet been
filed
under Rule 1007;
(4)
cooperate with the trustee in the preparation
of an inventory, the examination of proofs of claim, and the
administration of
the estate, and
(5) file
a statement of any change of the debtor's
address.
Rule
4003. Exemptions
(a) Claim
of exemptions. A debtor shall list the property claimed as
exempt under § 209 of Title 31 on the schedule of assets required
to be filed
by Rule 1007. If the debtor fails to claim exemptions or file the
schedule
within the time specified in Rule 1007, a dependent of the debtor may
file the
list within 30 days thereafter.
(b)
Objections to claim of exemptions.An interested party may file an
objection to the list of property claimed as exempt only within 30 days
after
the creditors' meeting held under Rule 2003 is concluded or within 30
days
after any amendment to the list or supplemental schedules is filed,
whichever
is later. The court may, for cause, extend the time for filing
objections if,
before the time to object expires, an interested party files a request
for an
extension. Copies of the objections shall be delivered or mailed to the
receiver, the person filing the list, and that person's attorney.
(c)
Burden of proof.In any hearing under this rule, the objecting party
has the burden of proving that the exemptions are not properly claimed.
After
hearing on notice, the court shall determine the issues presented by
the
objections.
(d)
Avoidance by debtor of transfers of exempt property.A proceeding by
the debtor to avoid a lien or other transfer of property exempt under
§ 209 of
Title 31 shall be by motion in accordance with Rule 9014.
Rule
4004. Grant or Denial of Discharge
(a) Time
for filing complaint objecting to discharge; notice of time
fixed.In a chapter 2 liquidation case a complaint objecting to the
debtor's
discharge under § 208(1) of Title 31 shall be filed not later than
60 days
after the first date set for the meeting of creditors held under §
308. In a
chapter 3 reorganization case, the complaint shall be filed not later
than the
first date set for the hearing on confirmation. Not less than 25 days
notice of
the time so fixed shall be given to all creditors as provided in Rule
2002(f)
and (k) and to the receiver and the receiver's attorney.
(b)
Extension of time.On any interested party's motion, after hearing on
notice, the court may extend for cause the time for filing a complaint
objecting to discharge. The motion shall be made before the time has
expired.
(c) Grant
of discharge.
(1) In a
chapter 2 case, on expiration of the time
fixed for filing a complaint objecting to discharge and the time fixed
for
filing a motion to dismiss the case under Rule 1017(e) , the court
shall
forthwith grant the discharge unless:
(A) the
debtor is not an
individual,
(B) a
complaint objecting to the
discharge has been filed,
(C) the
debtor has filed a
waiver,
(D) a
motion to dismiss the case
under Rule 1017 is pending,
(E) a
motion to extend the time
for filing a complaint objecting to the discharge is pending,
(F) a
motion to extend the time
for filing a motion to dismiss the case under Rule 1017(e) is pending,
or
(G) the
debtor has not paid in
full the filing fee prescribed by Rule 1006.
(2)
Notwithstanding Rule 4004(c) (1) , on the
debtor's motion, the court may defer the entry of an order granting a
discharge
for 30 days and, on motion within that period, the court may defer
entry of the
order to a date certain.
(d)
Applicability of rules in Part VIIA proceeding started by a
complaint objecting to discharge is governed by Part VII of these rules.
(e)
Discharge order.A discharge order shall conform to the appropriate
Official Form.
(f)
Registration in other states.A discharge order that has become final
may be registered in any other state by filing a certified copy of the
order in
the clerk's office in that state. When so registered the order of
discharge
shall have the same effect as a court order in the state where
registered.
(g)
Notice of discharge.The clerk shall promptly mail a copy of the
final order of discharge to those specified in subdivision (a) .
Rule
4005. Burden of Proof in Objecting to Discharge
At the
trial on a complaint objecting to a discharge, the plaintiff has
the burden of proving the objection.
Rule
4006. Notice of No Discharge
If an
order is entered denying or revoking a discharge or if a waiver of
discharge is filed, the clerk, after the order becomes final or the
waiver is
filed, shall promptly give notice thereof to all creditors in the
manner
provided in Rule 2002.
Rule
4007. Determination of Dischargeability of a Debt
(a)
Persons entitled to file complaint.A debtor or any creditor may file
a complaint to obtain a determination of the dischargeability of any
debt.
(b) Time
for starting proceeding.A complaint may be filed at any time. A
case may be reopened without payment of an additional filing fee for
the
purpose of filing a complaint to obtain a determination under this rule.
(c) Time
for filing complaint under § 208(2) (a) in chapter 2 liquidation
and chapter 3 reorganization cases; notice of time fixed. A complaint
to
determine the dischargeability of any debt under § 208(2) (a) of
Title 31 shall
be filed not later than 60 days after the first date set for the
meeting of
creditors held under Rule 2003. The court shall give all creditors not
less
than 30 days notice of the time so fixed in the manner provided in Rule
2002.
On any interested party's motion, after hearing on notice, the court
may for
cause extend the time fixed under this subdivision. The motion shall be
made
before the time has expired.
(d)
Applicability of Part VII rules.A proceeding started by a complaint
filed under this rule is governed by Part VII of these rules.
Rule
4008. Discharge and Reaffirmation Hearing
Not more
than 30 days after the entry of an order granting or denying a
discharge, or confirming a plan in a chapter 3 reorganization case and
on not
less than 10 days notice to the debtor and the receiver or trustee, the
court
may hold a hearing at which it shall inform the debtor that a discharge
has
been granted or the reason why a discharge has not been granted. A
debtor's
motion for approval of a reaffirmation agreement shall be filed before
or at
the hearing.
PART V.
COURTS AND CLERKS
Rule
5001. Courts and Clerks' Offices
(a) Court
always open.The court shall be deemed always open for the
purpose of filing any pleading or other proper paper, issuing and
returning
process, and filing, making, or entering motions, orders and rules.
(b)
Trials and hearings; orders in chambers.All trials and hearings
shall be conducted in open court and so far as convenient in a regular
court
room. All other acts or proceedings may be done or conducted by a judge
in
chambers and at any place either within or without the state, but no
hearing,
other than one ex parte, shall be conducted outside the state without
the
consent of all parties affected thereby.
(c)
Clerk's office.The clerk's office with the clerk or an assistant in
attendance shall be open during business hours on all days except
Saturdays,
Sundays and the legal holidays listed in Rule 9006(a) .
Rule
5002. Restrictions on Appointments
(a)
Approval of appointment of relatives prohibited.The appointment of
an individual as a trustee or receiver under § 203 of Title 31 or
as a trustee
under § 302 of Title 31 shall not be approved by the court if the
individual is
a relative of the judge approving the appointment. The employment of an
individual as attorney, accountant, appraiser, auctioneer, or other
professional person under § 111 shall not be approved by the court
if the
individual is a relative of the judge approving the employment.
Whenever under
this subdivision an individual may not be approved for appointment or
employment, the individual's firm, partnership, corporation, or any
other form
of business association or relationship, and all members, associates
and
professional employees thereof also may not be approved for appointment
or
employment.
(b)
Judicial determination that approval of appointment or employment is
improper.A judge may not approve the appointment of a person as a
receiver or
trustee under § 203 of Title 31 or as a trustee under § 302
of Title 31 or
approve the employment of a person as an attorney, accountant,
appraiser,
auctioneer, or other professional person under § 111 of Title 31
if that person
is or has been so connected with that judge as to render the
appointment or
employment improper.
Rule
5003. Records Kept By the Clerk
(a)
Bankruptcy dockets.The clerk shall keep a docket in each case under
Title 31 and shall enter thereon each judgment, order, and activity in
that
case as prescribed by the Chief Clerk of Court. The entry of a judgment
or
order in a docket shall show the date the entry is made.
(b)
Claims register.The clerk shall keep in a claims register a list of
claims filed in a case when it appears that there will be a
distribution to
unsecured creditors.
(c)
Judgments and orders.The clerk shall keep, in the form and manner as
the Chief Clerk of Court may prescribe, a correct copy of every final
judgment
or order affecting title to or lien on real property or for the
recovery of
money or property, and any other order which the court may direct to be
kept.
On request of the prevailing party, a correct copy of every judgment or
order
affecting title to or lien upon real or personal property or for the
recovery
of money or property shall be kept and indexed with the civil judgments
of the
court.
(d) Index
of cases; certificate of search.The clerk shall keep indices
of all cases and adversary proceedings as prescribed by the Chief Clerk
of
Court. On request, the clerk shall make a search of any index and
papers in the
clerk's custody and certify whether a case or proceeding has been filed
in or
transferred to the court or if a discharge has been entered in its
records.
(e) Other
books and records of the clerk.The clerk shall also keep such
other books and records as may be required by the Chief Clerk of Court.
Rule
5004. Disqualification
(a)
Disqualification of judge.A judge shall be governed by 4 F.S.M.C.
124, and disqualified from presiding over the proceeding or contested
matter in
which the disqualifying circumstances arises or, if appropriate, shall
be
disqualified from presiding over the case.
(b)
Disqualification of judge from allowing compensation.A judge shall
be disqualified from allowing compensation to a person who is the
judge's
relative or with whom the judge is so connected as to render it
improper for
the judge to authorize the compensation.
Rule
5005. Filing
(a)
Filing; Place of filing.The lists, schedules, statements, proofs of
claim or interest, complaints, motions, applications, objections and
other
papers required to be filed by these rules, shall be filed with the
clerk in
the state where the case under Title 31 is pending. The judge of that
court may
permit the papers to be filed with the judge, in which event the filing
date
shall be noted thereon, and they shall be forthwith sent to the clerk.
The
clerk shall not refuse to accept for filing any application or other
paper
presented for the purpose of filing solely because it is not presented
in
proper form as required by these rules or any local rules or practices.
(b) Error
in filing.A paper intended to be filed with the clerk but erroneously
delivered to the trustee, the trustee's attorney, a trial judge, or the
clerk
in another state shall, after the date of its receipt has been noted
thereon,
be sent forthwith to the clerk where the case is pending. In the
interest of
justice, the court may order that a paper erroneously delivered shall
be deemed
filed with the clerk as of the date of its original delivery.
Rule
5006. Certification of Copies of Papers
The clerk
shall issue a certified copy of the record of any proceeding
in a case under Title 31 or of any paper filed with the clerk on
payment of any
prescribed fee.
Rule
5007. Record of Proceedings and Transcripts.
(a)
Filing of record or transcript.The reporter or operator of a
recording device shall certify the original notes of testimony, tape
recording,
or other original record of the proceeding and promptly file them with
the
clerk. The person preparing any transcript shall promptly file a
certified
copy.
(b)
Transcript fees.The fees for copies of transcripts shall be charged
at rates prescribed by FSM General Court Order 1991-3. No fee may be
charged
for the certified copy filed with the clerk.
(c)
Admissibility of record in evidence.A certified sound recording or a
transcript of a proceeding shall be admissible as prima facie evidence
to
establish the record.
Rule
5009. Closing Chapter 2 Liquidation Cases
If in a
chapter 2 case the receiver has filed a final report and final
account and has certified that the estate has been fully administered,
and if
within 30 days no objection has been filed by an interested party,
there shall
be a presumption that the estate has been fully administered.
Rule
5010. Disqualification
A case
may be reopened on motion of the debtor or other interested party
under § 311(2) of Title 31. In a chapter 2 case, a receiver shall
not be
appointed unless the court determines that a receiver is necessary to
protect
the interests of creditors and the debtor or to insure efficient
administration
of the case.
Rule
5011. Abstention from Hearing a Proceeding
(a)
Abstention from hearing a proceeding. A motion for abstention shall
be governed by Rule 9014 and shall be served on the parties to the
proceeding.
(b)
Effect of filing of motion for abstention. The filing of a motion
for abstention shall not stay the administration of the case or any
proceeding
therein before the trial judge but the trial judge may stay, on such
terms and
conditions as are proper, proceedings pending the motion's disposition.
PART VI.
COLLECTION AND LIQUIDATION OF THE ESTATE
Rule
6001. Burden of Proof for Validity of
Postapplication Transfer
Any
entity asserting the validity of a transfer under §§ 205-206
of
Title 31 shall have the burden of proof.
Rule
6002. Accounting by Prior Custodian of Property
of the Estate
(a)
Accounting required.Any custodian required by Title 31 to deliver
property in the custodian's possession or control to the receiver or
trustee
shall promptly file a report and account with respect to the property
of the
estate and the administration thereof.
Accounting
by Prior Custodian of Property of the Estate
(b)
Examination of administration.On the filing of the report and
account required by subdivision (a) and after an examination has been
made into
the superseded administration, after notice and a hearing, the court
shall determine
the propriety of the administration, including the reasonableness of
all
disbursements.
Rule
6004. Use, Sale , or
Lease of Property
(a)
Notice of proposed use, sale, or lease of property.Notice of a
proposed use, sale, or lease of property, other than cash collateral,
not in
the ordinary course of business shall be given under Rule 2002(a) (2) ,
(c) (1)
, (i) , and (k) and, if applicable, in accordance with § 202(1)
(a) or § 303(a)
of Title 31.
(b)
Objection to proposal.Except as provided in subdivisions (c) and (d)
, an objection to a proposed use, sale, or lease of property shall be
filed and
served not less than five days before the date set for the proposed
action or
within the time fixed by the court. An objection to the proposed use,
sale, or
lease of property is governed by Rule 9014.
(c) Sale
free and clear of liens and other interests.A motion for
authority to sell property free and clear of liens or other interests
shall be
made in accordance with Rule 9014 and shall be served on the parties
who have
liens or other interests in the property to be sold. The notice
required by
subdivision (a) shall include the date of the hearing on the motion and
the
time within which objections may be filed and served on the debtor in
possession or trustee.
(d) Sale
of property under $2,500.Notwithstanding subdivision (a) , when
all of the nonexempt property of the estate has an aggregate gross
value less
than $2,500, it shall be sufficient to give a general notice of intent
to sell
the property other than in the ordinary course of business to all
creditors,
committees appointed under Title 31, the trustee and other persons as
the court
may direct. An objection to any such sale may be filed and served by an
interested party within 15 days of the mailing of the notice, or within
the
time fixed by the court. An objection is governed by Rule 9014.
(e)
Hearing.If a timely objection is made under subdivision (b) or (d) ,
the date of the hearing thereon may be set in the notice given under
subdivision (a) .
(f)
Conduct of sale not in the ordinary course of business.
(1)
Public or private sale. All sales not in the
ordinary course of business may be by private sale or by public
auction. Unless
it is impracticable, an itemized statement of the property sold, the
name of
each purchaser, and the price received for each item or lot or for the
property
as a whole if sold in bulk shall be filed on completion of a sale. If
the
property is sold by an auctioneer, the auctioneer shall file the
statement, and
furnish a copy to the receiver, trustee, or debtor in possession. If
the
property is not sold by an auctioneer, the receiver, trustee, or debtor
in
possession shall file the statement.
(2)
Execution of instruments. After a sale in
accordance with this rule, the debtor, the receiver, the trustee, or
debtor in
possession, as the case may be, shall execute any instrument necessary
or
ordered by the court to effectuate the transfer to the purchaser.
Rule
6005. Appraisers and Auctioneers
The court
order approving the employment of an appraiser or auctioneer
shall fix the amount or rate of compensation. No officer or employee of
the
judicial branch of the Federated States of Micronesia or the Federated
States
of Micronesia Department of Justice shall be eligible to act as
appraiser or
auctioneer. No residence or licensing requirement shall disqualify an
appraiser
or auctioneer from employment.
Rule
6006. (a) Proceeding to assume, reject, or
assign.
A
proceeding to assume, reject, or assign an
executory contract or unexpired lease, other than as part of a plan, is
governed by Rule 9014.
(b)
Proceeding to require trustee to act.A proceeding by a party to an
executory contract or unexpired lease in a chapter 3 reorganization
case, to
require the trustee, debtor in possession, or debtor to determine
whether to
assume or reject the contract or lease is governed by Rule 9014.
(c)
Notice.Notice of a motion made under subdivision (a) or (b) shall be
given to the other party to the contract or lease, and to other
interested
parties as the court may direct.
Rule
6007. Abandonment or Disposition of Property
(a)
Notice of proposed abandonment or disposition; objections;
hearing.Unless the court otherwise directs, the trustee or debtor in
possession
shall give notice of a proposed abandonment or disposition of property
to all
creditors. An interested party may file and serve an objection within
15 days
of the mailing of the notice, or within the time fixed by the court. If
a
timely objection is made, the court shall set a hearing on notice as
the court
may direct.
(b)
Motion by interested party.An interested party may file and serve a
motion requiring the trustee or debtor in possession to abandon
property of the
estate.
Rule
6008. Redemption of Property from Lien or Sale
On motion
by the debtor, trustee, or debtor in possession and after
hearing on notice as the court may direct, the court may authorize the
redemption of property from a lien or from a sale to enforce a lien in
accordance with applicable law.
Rule
6009. Prosecution and Defense of Proceedings by
Trustee or Debtor in Possession
With or
without court approval, the trustee or debtor in possession may
prosecute or may enter an appearance and defend any pending action or
proceeding by or against the debtor, or start and prosecute any action
or
proceeding in behalf of the estate before any tribunal.
Rule
6010. Proceeding to Avoid Indemnifying Lien or
Transfer to Surety
If a lien
voidable under §§ 205-207 of Title 31 has been dissolved by
the
furnishing of a bond or other obligation and the surety thereon has
been
indemnified by the transfer of, or the creation of a lien upon, the
debtor's
nonexempt property, the surety shall be joined as a defendant in any
proceeding
to avoid the indemnifying transfer or lien. This proceeding is governed
by the
rules in Part VII.
PART VII.
ADVERSARY PROCEEDINGS
Rule
7001. Scope of Rules of Part VII
An
adversary proceeding is governed by the rules of this Part VII. It is
a proceeding (1) to recover money or property, except a proceeding to
compel
the debtor to deliver property to the trustee, or a proceeding under
§ 202(1)
(d) of Title 31, Rule 2017, or Rule 6002, (2) to determine the
validity,
priority, or extent of a lien or other interest in property, other than
a
proceeding under Rule 4003(d) , (3) to obtain approval under §
363(h) for the
sale of both the interest of the estate and of a co-owner in property,
(4) to
object to or revoke a discharge, (5) to revoke an order of confirmation
of a
chapter 3 plan, (6) to determine the dischargeability of a debt, (7) to
obtain
an injunction or other equitable relief, (8) to subordinate any allowed
claim
or interest, unless subordination is provided in a chapter 3 plan, (9)
to
obtain a declaratory judgment relating to any of the foregoing, or (10)
to
determine a claim or cause of action removed under FSM General Court
Order
1992-2.
Rule
7002. References to FSM Rules of Civil Procedure
Whenever
an FSM Rule of Civil Procedure applicable to adversary
proceedings makes reference to another FSM Rule of Civil Procedure, the
reference shall be read as a reference to the FSM Rule of Civil
Procedure as
modified in this Part VII.
Rule
7003. Start of Adversary Proceeding
FSM Civil
Procedure Rule 3 applies in adversary proceedings.
Rule
7004. Process; Service of Summons, Complaint
(a)
Summons; service; proof of service.FSM Civil Procedure Rule 4(a) ,
(b) , (c) (1) , and (d) -(i) applies in adversary proceedings. Personal
service
under FSM Civil Procedure Rule 4(d) -(i) may be made by any person at
least 18
years of age who is not a party, and the summons may be delivered by
the clerk
to any such person.
(b)
Service by first class mail.person. (b) Service by first class mail.
Except as provided in subdivision (h) , in addition to the methods of
service
authorized by FSM Civil Procedure Rule 4(d) -(i) , service may be made
within
the Federated States of Micronesia by first class mail postage prepaid
as
follows:
(1) Upon
an individual other than an infant or
incompetent, by mailing a copy of the summons and complaint to the
individual
or to where the individual regularly conducts a business or profession.
(2) Upon
an infant or an incompetent person, by
mailing a copy of the summons and complaint to the person upon whom
process is
prescribed to be served by the law of the state in which service is
made when
an action is brought against such a defendant in the courts of general
jurisdiction of that state. The summons and complaint in that case
shall be
addressed to the person required to be served.
(3) Upon
a domestic or foreign corporation or upon
a partnership or other unincorporated association, by mailing a copy of
the
summons and complaint to the attention of an officer, a managing or
general
agent, or to any other agent authorized by appointment or by law to
receive
service of process and, if the agent is one authorized by statute to
receive
service and the statute so requires, by also mailing a copy to the
defendant.
(4) Upon
the Federated States of Micronesia, by
mailing a copy of the summons and complaint addressed to the Secretary
of
Justice of the Federated States of Micronesia at Palikir, Pohnpei, and
in any
action attacking the validity of an order of an officer or an agency of
the
Federated States of Micronesia not made a party, by also mailing a copy
of the
summons and complaint to that officer or agency. The court shall allow
a
reasonable time for service under this subdivision for the purpose of
curing
the failure to mail a copy of the summons and complaint to multiple
officers,
agencies, or corporations of the Federated States of Micronesia if the
plaintiff has mailed a copy of the summons and complaint to the
Secretary of
Justice of the Federated States of Micronesia.
(5) Upon
any officer or agency of the Federated
States of Micronesia, by mailing a copy of the summons and complaint to
the
Federated States of Micronesia as prescribed in paragraph (4) and also
to the
officer or agency. If the agency is a corporation, the mailing shall be
as
prescribed in paragraph (3) . The court shall allow a reasonable time
for
service under this subdivision for the purpose of curing the failure to
mail a
copy of the summons and complaint to multiple officers, agencies, or
corporations of the Federated States of Micronesia if the plaintiff has
mailed
a copy of the summons and complaint to the Secretary of Justice.
(6) Upon
a state or municipal corporation or other
governmental organization thereof subject to suit, by mailing a copy of
the
summons and complaint to the person or office upon whom process is
prescribed
to be served by the law of the state in which service is made when an
action is
brought against such a defendant in the courts of general jurisdiction
of that
state, or in the absence of the designation of any such person or
office by
state law, then to the chief executive officer thereof.
(7) Upon
a defendant of any class referred to in
paragraph (1) or (3) , it is also sufficient if a copy of the summons
and
complaint is mailed to the entity upon whom service is prescribed to be
served
by any Federated States of Micronesia statute or by the law of the
state in
which service is made when an action is brought against such a
defendant in the
court of general jurisdiction of that state.
(8) Upon
any defendant, it is also sufficient if a
copy of the summons and complaint is mailed to an agent of such
defendant
authorized by appointment or by law to receive service of process and,
if the
authorization so requires, by mailing also a copy of the summons and
complaint
to the defendant as provided in this subdivision.
(9) Upon
the debtor, after an application has been
filed by or served upon the debtor and until the case is dismissed or
closed,
by mailing a copy of the summons and complaint to the debtor at the
address
shown in the application or statement of affairs or to such other
address as
the debtor may designate in a filed writing and, if the debtor is
represented
by an attorney, to the attorney at the attorney's post-office address.
(c)
Service by publication.If a party to an adversary proceeding to
determine or protect rights in property in the custody of the court
cannot be
served as provided in FSM Civil Procedure Rule 4(d) -(i) or subdivision
(b) of
this rule, the court may order the summons and complaint to be served
by
mailing copies thereof by first class mail, postage prepaid, to the
party's
last known address, and by at least one publication in such manner and
form as
the court may direct.
(d)
Nationwide service of process.The summons and complaint and all other
process may be served anywhere in the Federated States of Micronesia .
(e)
Summons: time limit for service.If service is made under FSM Civil
Procedure Rule 4(d) -(i) it shall be made by delivery of the summons
and
complaint within 10 days after issuance of the summons. If service is
made by
any authorized form of mail, the summons and complaint shall be
deposited in
the mail within 10 days after issuance of the summons. If a summons is
not
timely delivered or mailed, another summons shall be issued and served.
(f)
Personal jurisdiction. f the exercise of jurisdiction is consistent
with the Federated States of Micronesia Constitution and laws, serving
a
summons in accordance with this rule or the subdivisions of FSM Civil
Procedure
Rule 4 made applicable by these rules is effective to establish
personal
jurisdiction over the person of any defendant with respect to a case
under
Title 31 or a civil proceeding arising under Title 31, or arising in or
related
to a case under Title 31.
Rule
7005. Service and Filing of Pleadings and Other
Papers
FSM Civil
Procedure Rule 5 applies in adversary proceedings.
Rule
7007. Pleadings Allowed
FSM Civil
Procedure Rule 7 applies in adversary proceedings.
Rule
7007.1. Corporate Ownership Statement
(a)
Required disclosure.Any corporation that is a party to an adversary
proceeding, other than the debtor or a governmental unit, shall file
two copies
of a statement that identifies any corporation, other than a
governmental unit,
that directly or indirectly owns 10% or more of any class of the
corporation's
equity interests, or states that there are no entities to report under
this
subdivision.
(b) Time
for filing.A party shall file the statement required under Rule
7007.1(a) with its first pleading in an adversary proceeding. A party
shall
file a supplemental statement promptly upon any change in circumstances
that
this rule requires the party to identify or disclose.
Rule
7008. General Rules of Pleading
(a)
Applicability of FSM Civil Procedure Rule 8.FSM Civil Procedure Rule
8 applies in adversary proceedings. The allegation of jurisdiction
required by
Rule 8(a) shall also contain a reference to the name, number, and
chapter of
the case under Title 31 to which the adversary proceeding relates and
to the
state where the Title 31 case is pending.
(b)
Attorney's fees.A request for an award of attorney's fees shall be
pleaded as a claim in a complaint, cross-claim, third-party complaint,
answer,
or reply as may be appropriate.
Rule
7009. Pleading Special Matters
FSM Civil
Procedure Rule 9 applies in adversary proceedings
Rule
7010. Form of Pleadings
FSM Civil
Procedure Rule 10 applies in adversary proceedings, except
that the caption of each pleading in such a proceeding shall conform
substantially to the appropriate Official Form.
Rule
7012. Defenses and Objections When and How
Presented By Pleading or Motion Motion for Judgment on the Pleadings
(a) When
presented.If a complaint is duly served, the defendant shall
serve an answer within 30 days after the issuance of the summons,
unless a different
time is prescribed by the court. The court shall prescribe the time for
service
of the answer when service of a complaint is made by publication or
upon a
party in a foreign country. A party served with a pleading stating a
cross-claim shall serve an answer thereto within 20 days after service.
The
plaintiff shall serve a reply to a counterclaim in the answer within 20
days
after service of the answer or, if a reply is ordered by the court,
within 20
days after service of the order, unless the order otherwise directs.
The
Federated States of Micronesia or an officer or agency thereof shall
serve an
answer to a complaint within 35 days after the issuance of the summons,
and
shall serve an answer to a cross-claim, or a reply to a counterclaim,
within 35
days after service upon the Federated States of Micronesia Department
of
Justice of the pleading in which the claim is asserted. The service of
a motion
permitted under this rule alters these periods of time as follows,
unless a
different time is fixed by court order: (1) if the court denies the
motion or
postpones its disposition until the trial on the merits, the responsive
pleading shall be served within 10 days after notice of the court's
action; (2)
if the court grants a motion for a more definite statement, the
responsive
pleading shall be served within 10 days after the service of a more
definite
statement.
(b)
Applicability of FSM Civil Procedure Rule 12(b) -(h) . FSM Civil
Procedure Rule 12(b) -(h) applies in adversary proceedings.
Rule
7013. Counterclaim and Cross-Claim
FSM Civil
Procedure Rule 13 applies in adversary proceedings, except
that a party sued by a trustee or debtor in possession need not state
as a
counterclaim any claim that the party has against the debtor, the
debtor's property,
or the estate, unless the claim arose after the entry of an order for
relief. A
trustee or debtor in possession who fails to plead a counterclaim
through
oversight, inadvertence, or excusable neglect, or when justice so
requires, may
by leave of court amend the pleading, or start a new adversary
proceeding or
separate action.
Rule
7014. Third-Party Practice
FSM Civil
Procedure Rule 14 applies in adversary proceedings.
Rule
7015. Amended and Supplemental Pleadings
FSM Civil
Procedure Rule 15 applies in adversary proceedings.
Rule
7016. Pre-Trial Procedure; Formulating Issues
FSM Civil
Procedure Rule 16 applies in adversary proceedings.
Rule
7017. Parties Plaintiff and Defendant; Capacity
FSM Civil
Procedure Rule 17 applies in adversary proceedings, except as
provided in Rule 2010(b) .
Rule
7018. Joinder of Claims and Remedies
FSM Civil
Procedure Rule 18 applies in adversary proceedings.
Rule
7019. Joinder of Persons Needed for Just
Determination
FSM Civil
Procedure Rule 19 applies in adversary proceedings, except
that if an entity joined as a party properly and timely raises the
defense of
improper venue, the court shall determine, as provided in 6 F.S.M.C.
304,
whether that part of the proceeding involving the joined party shall be
transferred to another state, or whether the entire adversary
proceeding shall
be transferred to another state.
Rule
7020. Permissive Joinder of Parties
FSM Civil
Procedure Rule 20 applies in adversary proceedings.
Rule
7021. Misjoinder and Non-Joinder of Parties
FSM Civil
Procedure Rule 21 applies in adversary proceedings.
Rule
7022. Interpleader
FSM Civil
Procedure Rule 22(1) applies in adversary proceedings.
Rule
7023. Class proceedings
FSM Civil
Procedure Rule 23 applies in adversary proceedings.
Rule
7023.1. Derivative Proceedings by Shareholders
FSM Civil
Procedure Rule 23.1 applies in adversary proceedings.
Rule
7023.2. Adversary Proceedings Relating to
Unincorporated Associations
FSM Civil
Procedure Rule 23.2 applies in adversary proceedings.
Rule
7024. Intervention
FSM Civil
Procedure Rule 24 applies in adversary proceedings.
Rule
7025. Substitution of Parties
Subject
to the provisions of Rule 2012, FSM Civil Procedure Rule 25
applies in adversary proceedings.
Rule
7026. General Provisions Governing Discovery
FSM Civil
Procedure Rule 26 applies in adversary proceedings.
Rule
7027. Depositions Before Adversary Proceedings or
Pending Appeal
FSM Civil
Procedure Rule 27 applies to adversary proceedings.
Rule
7028. Persons Before Whom Depositions May be
Taken
FSM Civil
Procedure Rule 28 applies in adversary proceedings.
Rule
7029. Stipulations Regarding Discovery Procedure
FSM Civil
Procedure Rule 29 applies in adversary proceedings.
Rule
7030. Depositions Upon Oral Examination
FSM Civil
Procedure Rule 30 applies in adversary proceedings.
Rule
7031. Deposition Upon Written Questions
FSM Civil
Procedure Rule 31 applies in adversary proceedings.
Rule
7032. Use of Depositions in Adversary Proceedings
FSM Civil
Procedure Rule 32 applies in adversary proceedings.
Rule
7033. Interrogatories to Parties
FSM Civil
Procedure Rule 33 applies in adversary proceedings.
Rule
7034. Production of Documents and Things and
Entry Upon Land for Inspection and Other Purposes
FSM Civil
Procedure Rule 34 applies in adversary proceedings.
Rule
7035. Physical and Mental Examination of Persons
FSM Civil
Procedure Rule 35 applies in adversary proceedings.
Rule
7036. Requests for Admission
FSM Civil
Procedure Rule 36 applies in adversary proceedings.
Rule
7037. Failure to Make Discovery: Sanctions
FSM Civil
Procedure Rule 37 applies in adversary proceedings.
Rule
7041. Dismissal of Adversary Proceedings
FSM Civil
Procedure Rule 41 applies in adversary proceedings, except
that a complaint objecting to the debtor's discharge shall not be
dismissed at
the plaintiff's instance without notice to the receiver or trustee, and
such
other persons as the court may direct, and only by court order
containing terms
and conditions which the court deems proper.
Rule
7042. Consolidation of Adversary Proceedings;
Separate Trials
FSM Civil
Procedure Rule 42 applies in adversary proceedings.
Rule
7052. Findings by the Court
FSM Civil
Procedure Rule 52 applies in adversary proceedings.
Rule
7054. Judgments; Costs
(a)
Judgments.FSM Civil Procedure Rule 54(a) -(c) applies in adversary
proceedings.
(b)
Costs.The court may allow costs to the prevailing party unless a
Federated States of Micronesia statute or these rules otherwise
provides. Costs
against the Federated States of Micronesia , its officers and agencies
shall be
imposed only to the extent permitted by law. Costs may be taxed by the
clerk on
one day's notice; on motion served within five days thereafter, the
action of
the clerk may be reviewed by the court.
Rule
7055. Default
FSM Civil
Procedure Rule 55 applies in adversary proceedings.
Rule
7056. Summary Judgment
FSM Civil
Procedure Rule 56 applies in adversary proceedings.
Rule
7062. Stay of Proceedings to Enforce a Judgment
FSM Civil
Procedure Rule 62 applies in adversary proceedings. An order
granting relief from an automatic stay provided by § 106 of Title
31 and orders
under § 202(1) (a) or § 303(a) authorizing or prohibiting the
use of cash
collateral or the use, sale or lease of the estate's property, or
authorizing
the trustee to obtain credit, or authorizing the assumption or
assignment of an
executory contract or unexpired lease shall be additional exceptions to
Rule
62(a) .
Rule
7064. Seizure of Person or Property
FSM Civil
Procedure Rule 64 applies in adversary proceedings.
Rule
7064. Injunctions
FSM Civil
Procedure Rule 65 applies in adversary proceedings, except
that a temporary restraining order or preliminary injunction may be
issued on
application of a debtor, receiver, trustee, or debtor in possession
without
compliance with Rule 65(c) .
Rule
7067. Deposit in Court
FSM Civil
Procedure Rule 67 applies in adversary proceedings.
Rule
7068. Offer of Judgment
FSM Civil
Procedure Rule 68 applies in adversary proceedings.
Rule
7069. Execution
FSM Civil
Procedure Rule 69 applies in adversary proceedings.
Rule
7070. Judgment for Specific Acts; Vesting Title
FSM Civil
Procedure Rule 70 applies in adversary proceedings and the
court may enter a judgment divesting the title of any party and vesting
title
in others whenever the real or personal property involved is within the
jurisdiction of the court.
Rule
7071. Process in Behalf of and Against Persons
Not Parties
FSM Civil
Procedure Rule 71 applies in adversary proceedings.
Rule
7087. Transfer of Adversary Proceeding
On motion
and after a hearing, the court may transfer an adversary
proceeding or any part thereof to another state under 6 F.S.M.C. 304,
except as
provided in Rule 7019(2) .
PART
VIII. APPEALS TO APPELLATE DIVISION
Rule
8001. Manner of Taking Appeal; Voluntary
Dismissal
(a)
Appeal as of right; how taken.An appeal from a trial division
judgment, order, or decree to the appellate division as permitted by 4
F.S.M.C.
201(1) and FSM Appellate Rule 4(a) (1) (A) shall be taken by filing a
notice of
appeal with the clerk within the time allowed by Rule 8002. Three
copies shall
be filed with the original. An appellant's failure to take any step
other than
timely filing a notice of appeal does not affect the appeal's validity,
but is
ground only for such action as the appellate court deems appropriate,
which may
include the appeal's dismissal. The notice of appeal shall (1) conform
substantially to the appropriate Official Form, and (2) contain the
names of
all parties to the judgment, order, or decree appealed from and the
names,
addresses, and telephone numbers of their respective attorneys.
Manner of
Taking Appeal; Voluntary Dismissal
(b)
Appeal by leave; how taken. An appeal from an interlocutory
judgment, order, or decree as permitted by FSM Appellate Rule 5(a)
shall be
taken by filing a notice of appeal, as prescribed in subdivision (a) of
this
rule, accompanied by a motion for leave to appeal prepared in
accordance with
Rule 8003 and with proof of service in accordance with Rule 8008.
(c)
Voluntary dismissal. If the parties to the appeal sign and file with
the appellate division clerk an agreement that the appeal be dismissed
and pay
any court costs or fees that may be due, the appellate division clerk
shall
enter an order dismissing the appeal. An appeal may also be dismissed
on the
appellant's motion on terms and conditions fixed by the appellate
division.
Rule
8002. Time for Filing Notice of Appeal
(a)
Ten-day period. The notice of appeal shall be filed with the FSM
Supreme Court trial division clerk in the state where the decision
appealed
from was made or, at the appellant's option, directly with the FSM
Supreme
Court appellate division clerk, within 10 days of the date of the entry
of the
judgment, order, or decree appealed from. If a party files a timely
notice of
appeal, any other party may file a notice of appeal within 10 days of
the date
on which the first notice of appeal was filed, or within the time
otherwise
prescribed by this rule, whichever period last expires. A notice of
appeal
filed after the announcement of a decision or order but before entry of
the
judgment, order, or decree shall be treated as filed after such entry
and on
the day thereof.
(b)
Effect of motion on time for appeal.If any party makes a timely motion
of a type specified immediately below, the time for appeal for all
parties runs
from the entry of the order disposing of the last such motion
outstanding. This
provision applies to a timely motion:
(1) to
amend or make additional findings of fact
under Rule 7052, whether or not granting the motion would alter the
judgment;
(2) to
alter or amend the judgment under Rule 9023;
(3) for a
new trial under Rule 9023; or
(4) for
relief under Rule 9024 if the motion is
filed no later than 10 days after the entry of judgment. A notice of
appeal
filed after announcement or entry of the judgment, order, or decree but
before
disposition of any of the above motions is ineffective to appeal from
the
judgment, order, or decree, or part thereof, specified in the notice of
appeal,
until the entry of the order disposing of the last such motion
outstanding.
Appellate review of an order disposing of any of the above motions
requires the
party, in compliance with Rule 8001, to amend a previously filed notice
of
appeal. A party intending to challenge an alteration or amendment of
the
judgment, order, or decree shall file a notice, or an amended notice,
of appeal
within the time prescribed by this Rule 8002 measured from the entry of
the
order disposing of the last such motion outstanding.
(c)
Extension of time for appeal
(1) The
trial court may extend the time for any
party to file a notice of appeal, unless the judgment, order, or decree
appealed from:
(A)
grants relief from an
automatic stay under § 106,
(B)
authorizes the sale or lease
of property or the use of cash collateral under § 202(1) (a) ;
(C)
authorizes the obtaining of
credit under § 202(1) (b) ;
(D)
authorizes the assumption or
assignment of an executory contract or unexpired lease under §
202(1) (c) ;
(E)
approves a disclosure
statement under Rule 3017; or
(F)
confirms a plan under § 310
of Title 31.
(2) A
request to extend the time for filing a
notice of appeal must be made by written motion filed before the time
for
filing a notice of appeal has expired, but such a motion filed not
later than
20 days after the expiration of the time for filing a notice of appeal
may be
granted upon a showing of excusable neglect. An extension of time for
filing a
notice of appeal may not exceed 20 days from the expiration of the time
for
filing a notice of appeal otherwise prescribed by this rule or 10 days
from the
date of entry of the order granting the motion, whichever is later.
Rule
8003. Leave to Appeal
(a)
Petition for Permission to Appeal.When a trial division justice, in
making an order not otherwise appealable under Rule 8001(a) , shall be
of the
opinion that the order involves a controlling question of law about
which there
is substantial ground for difference of opinion and that an immediate
appeal
from the order may materially advance the litigation's ultimate
termination,
the justice shall so state in writing in the order. An order may be
amended to
include the prescribed statement at any time, and permission to appeal
may be
sought within 10 days after entry of the order as amended.
(b)
Content of motion; answer.An original and three copies of a motion
for leave to appeal under this Rule, along with a notice of appeal,
shall be
filed in the appellate division and the motion must contain: (1) a
statement of
the facts necessary to an understanding of the questions to be
presented by the
appeal; (2) a statement of those questions and of the relief sought;
(3) a
statement of the reasons why an appeal should be granted; and (4) a
copy of the
judgment, order, or decree complained of and of any opinion or
memorandum
relating thereto. Within 10 days after service of the motion, an
adverse party
may file with the appellate clerk an answer in opposition.
(c)
Determination of motion.The remaining article XI, section 3 Supreme
Court justice(s) , acting as the appellate division, may permit an
appeal to be
taken from the order, if application is made to the appellate division
within
10 days after the entry of the order with proof of service on all other
parties
to the action in the court from which the appeal is being taken.
Application
for an appeal under this Rule shall not stay proceedings in the trial
division
unless the trial division justice or the appellate division or a
justice
thereof shall so order. The motion and answer shall be submitted
without oral
argument unless otherwise ordered.
Rule
8004. Service of the Notice of Appeal
The
appellant shall serve notice of the filing of a notice of appeal by
mailing a copy thereof to counsel of record of each party other than
the appellant
or, if a party is not represented by counsel, to the party's last known
address. Failure to serve notice shall not affect the validity of the
appeal.
Rule
8005. Stay Pending Appeal
A motion
for a stay of the judgment, order, or decree of the trial
judge, for approval of a supersedeas bond, or for other relief pending
appeal
must ordinarily be presented to the trial judge in the first instance.
Notwithstanding Rule 7062 but subject to the appellate court's power
reserved
hereinafter, the trial judge may suspend or order the continuation of
other
proceedings in the case under Title 31 or make any other appropriate
order
during the pendency of an appeal on such terms as will protect the
rights of
all interested parties. A motion for such relief, or for modification
or
termination of relief granted by the trial judge, may be made to the
appellate
court, but the motion shall show why the relief, modification, or
termination
was not obtained from the trial judge. The appellate court may
condition the
relief it grants under this rule on the filing of a bond or other
appropriate
security with the trial division. When an appeal is taken by a trustee
or
receiver, a bond or other appropriate security may be required, but
when an
appeal is taken by the Federated States of Micronesia or an officer or
agency
thereof or by direction of any department of the Federated States of
Micronesia
government a bond or other security shall not be required.
Rule
8006. Record and Issues on Appeal
Within 10
days after filing the notice of appeal as provided by Rule
8001(a) , entry of an order granting leave to appeal, or entry of an
order
disposing of the last timely motion outstanding of a type specified in
Rule
8002(b) , whichever is later, the appellant shall file with the clerk
and serve
on the appellee a designation of the items to be included in the record
on
appeal and a statement of the issues to be presented. Within 10 days
after the
service of the appellant's statement the appellee may file and serve on
the
appellant a designation of additional items to be included in the
record on
appeal and, if the appellee has filed a cross appeal, the appellee as
cross
appellant shall file and serve a statement of the issues to be
presented on the
cross appeal and a designation of additional items to be included in
the
record. A cross appellee may, within 10 days of service of the cross
appellant's statement, file and serve on the cross appellant a
designation of
additional items to be included in the record. The record on appeal
shall
include the items so designated by the parties, the notice of appeal,
the
judgment, order, or decree appealed from, and any opinion, findings of
fact,
and conclusions of law of the court. Any party filing a designation of
the
items to be included in the record shall provide to the clerk a copy of
the
items designated or, if the party fails to provide the copy, the clerk
shall
prepare the copy at the party's expense. If the record designated by
any party
includes a transcript of any proceeding or a part thereof, the party
shall,
immediately after filing the designation, deliver to the reporter and
file with
the clerk a written request for the transcript and make satisfactory
arrangements for payment of its cost. All parties shall take any other
action
necessary to enable the clerk to assemble and transmit the record.
Rule
8007. Completion and Transmission of the Record;
Docketing of the Appeal
FSM
Appellate Procedure Rule 11 applies.
Rule
8008. Filing and Service
FSM
Appellate Procedure Rule 25 applies.
Rule
8009. Briefs and Appendix; Filing and Service
(a)
Briefs.Unless the appellate court by order excuses the filing of
briefs or specifies different time limits:
(1) The
appellant shall serve and file a brief
within 15 days after appellate division clerk's issuance of notice of
receipt
of the "record ready certificate" from the clerk of the court
appealed from under FSM Appellate Procedure Rule 11(c) .
(2) The
appellee shall serve and file a brief
within 15 days after service of the appellant's brief. If the appellee
has
filed a cross appeal, the brief of the appellee shall contain the
issues and
argument pertinent to the cross appeal, denominated as such, and the
response
to the brief of the appellant.
(3) The
appellant may serve and file a reply brief
within 10 days after service of the appellee's brief, and if the
appellee has
cross-appealed, the appellee may file and serve a reply brief to the
response
of the appellant to the issues presented in the cross appeal within 10
days
after service of the reply brief of the appellant. No further briefs
may be
filed except with leave of the appellate court.
(b)
Appendix to brief.The appellant shall serve and file with the
appellant's brief excerpts of the record as an appendix, which shall
include
the following:
(1) The
complaint and answer or other equivalent
pleadings;
(2) Any
pretrial order;
(3) The
judgment, order, or decree from which the
appeal is taken;
(4) Any
other orders relevant to the appeal;
(5) The
opinion, findings of fact, or conclusions
of law filed or delivered orally by the court and citations of the
opinion if
published;
(6) Any
motion and response on which the court
rendered decision;
(7) The
notice of appeal;
(8) The
relevant entries in the bankruptcy docket;
and
(9) The
transcript or part thereof, if necessary
and relevant to the appeal. An appellee may also serve and file an
appendix
which contains material required to be included by the appellant but
omitted by
appellant.
Rule
8010. Form of Briefs; Length
FSM
Appellate Rules 28 and 29 apply and the appellant's brief shall also
contain a statement of the basis of appellate jurisdiction.
Rule
8011. Motions
FSM
Appellate Procedure Rule 27 applies. All motions will be decided
without oral argument unless the court orders otherwise. A motion for a
stay,
or for other emergency relief may be denied if not presented promptly.
Rule
8012. Oral Argument
FSM
Appellate Procedure Rule 34 applies.
Rule
8013. Disposition of Appeal; Weight Accorded
Trial Judge's Findings of Fact
On an
appeal, the appellate court may affirm, modify, or reverse the
trial judge's judgment, order, or decree or remand with instructions
for
further proceedings. Findings of fact, whether based on oral or
documentary
evidence, shall not be set aside unless clearly erroneous, and due
regard shall
be given to the opportunity of the trial court to judge the witnesses'
credibility.
Rule
8014. Costs
FSM
Appellate Procedure Rule 39 applies.
Rule
8015. Motion for Rehearing
FSM
Appellate Procedure Rule 40 applies
Rule
8016. Appellate Clerk's Duties
FSM
Appellate Procedure Rules 36 and 45 apply.
Rule
8019. Suspension of Rules in Part VIII
In the
interest of expediting decision or for other cause, the appellate
division may suspend the requirements or provisions of the rules in
Part VIII,
except Rules 8001, 8002, and 8013, and may order proceedings in
accordance with
the direction.
Rule
8020. Damages and Costs for Frivolous Appeal
If the
appellate court determines that an appeal from an order,
judgment, or decree of a trial judge is frivolous, it may, after a
separately
filed motion or after notice from the appellate court and reasonable
opportunity to respond, award just damages and single or double costs
to the
appellee.
PART IX.
GENERAL PROVISIONS
Rule
9001. General Definitions
The
definitions of words and phrases in § 102 of Title 31 and the
rules
of construction in Public Law No. 13-73, § 1 govern their use in
these rules.
In addition, the following words and phrases used in these rules have
the
meanings indicated:
(1)
"Debtor." When any act is required by
these rules to be performed by a debtor or when it is necessary to
compel
attendance of a debtor for examination and the debtor is not a natural
person:
(A) if
the debtor is a
corporation, "debtor" includes, if designated by the court, any or
all of its officers, members of its board of directors or trustees or
of a
similar controlling body, a controlling stockholder or member, or any
other person
in control;
(B) if
the debtor is a
partnership, "debtor" includes any or all of its general partners or,
if designated by the court, any other person in control.
(2)
"Firm" includes a partnership or
professional corporation of attorneys or accountants.
(3)
"Judgment" means any appealable
order.
(4)
"Mail" means first class, postage
prepaid.
(5)
"Regular associate" means any
attorney regularly employed by, associated with, or counsel to an
individual or
firm.
(6)
"Title 31" means Title 31 of the Code
of the Federated States of Micronesia .
(7)
"Trustee" includes a debtor in
possession in a chapter 3 case.
Rule
9002. Meanings of Words in the Rules of Civil
Procedure When Applicable to Cases Under Title 31
The
following words and phrases used in the FSM Rules of Civil Procedure
made applicable to cases under Title 31 by these rules have the
meanings
indicated unless they are inconsistent with the context:
(1)
"Action" or "civil action"
means an adversary proceeding or, when appropriate, a contested
application, or
proceedings to vacate an order for relief or to determine any other
contested
matter.
(2)
"Appeal" means an appeal as provided
by FSM Appellate Procedure Rules 4(a) (1) and 5.
(3)
"Clerk" means the court officer
responsible for the bankruptcy records in the state.
(4)
"Trial court," "court,"
"trial judge," or "judge" means the trial division justice
before whom the case is pending.
(5)
"Judgment" includes any order
appealable to an appellate court.
Rule
9003. Prohibition of Ex Parte Contacts
Except as
otherwise permitted by applicable law, any examiner, any
interested party, and any interested party's attorney, accountant, or
employee
shall refrain from ex parte meetings and communications with the court
concerning matters affecting a particular case or proceeding.
Rule
9004. General Requirements of Form; Filing
(a)
Legibility; abbreviations. All applications, pleadings, schedules
and other papers shall be clearly legible. Abbreviations in common use
in the
English language may be used.
(b)
Caption.Each paper filed shall contain a caption setting forth the
name of the court, the title of the case, the bankruptcy docket number,
and a
brief designation of the character of the paper.
(c)
Filing.Pleadings and other documents shall be filed with the court
in triplicate. All pleadings and documents should be filed on
letter–size
paper, not larger than 8½ x 11 inches, double spaced, each page
beginning not
less than 1¼ inches from the top, with side margins of not less
than 1¼ inches.
Rule
9005. Harmless Error
FSM Civil
Procedure Rule 61 applies in cases under Title 31. When
appropriate, the court may order the correction of any error or defect
or the
cure of any omission which does not affect substantial rights.
Rule
9006. Time
(a)
Computation.In computing any period of time prescribed or allowed by
these rules or by the FSM Rules of Civil Procedure made applicable by
these
rules, by order of court, or by any applicable statute, the day of the
act,
event, or default from which the designated period of time begins to
run shall
not be included. The last day of the period so computed shall be
included,
unless it is a Saturday, a Sunday, or a legal holiday, or, when the act
to be
done is the filing of a paper in court, a day on which weather or other
conditions have made the clerk's office inaccessible, in which event
the period
runs until the end of the next day which is not one of the
aforementioned days.
When the period of time prescribed or allowed is less than 8 days,
intermediate
Saturdays, Sundays, and legal holidays shall be excluded in the
computation. As
used in this rule and in Rule 5001(c) , "legal holiday" includes New
Year's Day, Constitution Day, United Nations Day, Independence Day,
Veterans
Day, Christmas Day, and any other day appointed as a holiday by the
President
or the Congress of the Federated States of Micronesia .
(b)
Enlargement.
(1) In
general. Except as provided in paragraphs
(2) and (3) , when an act is required or allowed to be done at or
within a
specified period by these rules or by a notice given thereunder or by
order of
court, the court for cause shown may at any time in its discretion (1)
with or
without motion or notice order the period enlarged if the request
therefor is
made before the expiration of the period originally prescribed or as
extended
by a previous order or (2) on motion made after the expiration of the
specified
period permit the act to be done where the failure to act was the
result of
excusable neglect.
(2)
Enlargement not permitted. The court may not
enlarge the time for taking action under Rules 1007(d) , 1017(b) (3) ,
2003(a)
and (d) , 7052, 9023, and 9024.
(3)
Enlargement limited. The court may enlarge the
time for taking action under Rules 1006(b) (2) , 1017(e) , 3002(c) ,
4003(b) ,
4004(a) , 4007(c) , 8002, and 9033, only to the extent and under the
conditions
stated in those rules.
(c)
Reduction.
(1) In
general. Except as provided in paragraph (2)
, when an act is required or allowed to be done at or within a
specified time
by these rules or by a notice given thereunder or by order of court,
the court
for cause shown may in its discretion with or without motion or notice
order
the period reduced.
(2)
Reduction not permitted. The court may not
reduce the time for taking action under Rules 2002(a) (7) , 2003(a) ,
3002(c) ,
3014, 3015, 4001(b) (2) , (c) (2) , 4003(a) , 4004(a) , 4007(c) , and
8002.
(d) For
motions affidavits.A written motion, other than one which may be
heard ex parte, and notice of any hearing shall be served not later
than
fourteen days before the time specified for the hearing, unless a
different
period is fixed by these rules or by court order. Such an order may for
cause
shown be made on ex parte application. When a motion is supported by
affidavit,
the affidavit shall be served with the motion; and, except as otherwise
provided in Rule 9023, opposing affidavits may be served not later than
seven
days before the hearing, unless the court permits them to be served at
some
other time.
(e) Time
of service.Service of process and service of any paper other
than process or of notice by mail is complete on mailing.
(f)
Additional time after service by mail.When there is a right or
requirement to do some act or undertake some proceedings within a
prescribed
period after service of a notice or other paper and the notice or paper
other
than process is served by mail, six days shall be added to the
prescribed
period.
Rule
9007. General Authority to Regulate Notices
When
notice is to be given under these rules, the court shall designate,
if not otherwise specified herein, the time within which, the entities
to whom,
and the form and manner in which the notice shall be given. When
feasible, the
court may order any notices under these rules to be combined.
Rule
9008. Service or Notice by Publication
Whenever
these rules require or authorize service or notice by
publication, the court shall, to the extent not otherwise specified in
these
rules, determine the form and manner thereof, including the newspaper
or other medium
to be used and the number of publications. Notice by publication can
include,
but must not be limited to, announcements on radio stations.
Rule
9009. Forms
The
Official Forms attached to these Rules shall be observed and used
with alterations as may be appropriate. Forms may be combined and their
contents rearranged to permit economies in their use. The Court may
issue
additional forms for use under Title 31. The forms shall be construed
to be
consistent with these rules and Title 31.
Rule
9010. Representation and Appearances; Powers of
Attorney
(a)
Authority to act personally or by attorney.A debtor, creditor,
equity security holder, committee, or other party may (1) appear in a
case
under Title 31 and act either in the entity's own behalf or by an
attorney
authorized to practice in the court, and (2) perform any act not
constituting
the practice of law, by an authorized agent, attorney in fact, or proxy.
(b)
Notice of appearance.An attorney appearing for a party in a case
under Title 31 shall file a notice of appearance with the attorney's
name,
address, and telephone number, unless the attorney's appearance is
otherwise
noted in the record.
(c) Power
of attorney.The authority of any agent, attorney in fact, or
proxy to represent a creditor for any purpose other than the execution
and
filing of a proof of claim or the acceptance or rejection of a plan
shall be
evidenced by a power of attorney conforming substantially to the
appropriate
Official Form. The execution of any such power of attorney shall be
acknowledged before a person authorized to administer oaths under the
laws of
the state where the oath is administered.
Rule
9011. Signing of Papers; Representations to the
Court; Sanctions; Verification and Copies of Papers
(a)
Signing of papers.Every application, pleading, written motion, and
other paper, except a list, schedule, or statement, or amendments
thereto,
shall be signed by at least one attorney of record in the attorney's
individual
name. A party who is not represented by an attorney shall sign all
papers. Each
paper shall state the signer's address and telephone number, if any. An
unsigned paper shall be stricken unless omission of the signature is
corrected
promptly after being called to the attention of the attorney or party.
(b)
Representations to the court.By presenting to the court (whether by
signing, filing, submitting, or later advocating) an application,
pleading,
written motion, or other paper, an attorney or unrepresented party is
certifying that to the best of the person's knowledge, information, and
belief,
formed after an inquiry reasonable under the circumstances:
(1) it is
not being presented for any improper
purpose, such as to harass or to cause unnecessary delay or needless
increase
in the cost of litigation;
(2) the
claims, defenses, and other legal
contentions therein are warranted by existing law or by a nonfrivolous
argument
for the extension, modification, or reversal of existing law or the
establishment of new law;
(3) the
allegations and other factual contentions
have evidentiary support or, if specifically so identified, are likely
to have
evidentiary support after a reasonable opportunity for further
investigation or
discovery; and
(4) the
denials of factual contentions are
warranted on the evidence or, if specifically so identified, are
reasonably
based on a lack of information or belief.
(c)
Sanctions.If, after notice and a reasonable opportunity to respond,
the court determines that subdivision (b) has been violated, the court
may,
subject to the conditions stated below, impose an appropriate sanction
upon the
attorneys, law firms, or parties that have violated subdivision (b) or
are
responsible for the violation.
(1) How
initiated.
(A) By
motion. A motion for
sanctions under this rule shall be made separately from other motions
or
requests and shall describe the specific conduct alleged to violate
subdivision
(b) . It shall be served as provided in Rule 7004. The motion for
sanctions may
not be filed with or presented to the court unless, within 21 days
after
service of the motion (or such other period as the court may prescribe)
, the
challenged paper, claim, defense, contention, allegation, or denial is
not
withdrawn or appropriately corrected, but this limitation shall not
apply if
the conduct alleged is the filing of an application in violation of
subdivision
(b) . If warranted, the court may award to the party prevailing on the
motion
the reasonable expenses and attorney's fees incurred in presenting or
opposing
the motion. Absent exceptional circumstances, a law firm shall be held
jointly
responsible for violations committed by its partners, associates, and
employees.
(B) On
court's initiative. On its
own initiative, the court may enter an order describing the specific
conduct
that appears to violate subdivision (b) and directing an attorney, law
firm, or
party to show cause why it has not violated subdivision (b) with
respect
thereto.
(2)
Nature of sanction; limitations. A sanction
imposed for violation of this rule shall be limited to what is
sufficient to
deter repetition of the conduct or comparable conduct by others
similarly
situated. Subject to the limitations in subparagraphs (A) and (B) , the
sanction may consist of, or include, directives of a nonmonetary
nature, an
order to pay a penalty into court, or, if imposed on motion and
warranted for
effective deterrence, an order directing payment to the movant of some
or all
of the reasonable attorneys' fees and other expenses incurred as a
direct
result of the violation.
(A)
Monetary sanctions may not be
awarded against a represented party for a violation of subdivision (b)
(2) .
(B)
Monetary sanctions may not be
awarded on the court's initiative unless the court issues its order to
show
cause before a voluntary dismissal or settlement of the claims made by
or
against the party which is, or whose attorneys are, to be sanctioned.
(3)
Order. When imposing sanctions, the court shall
describe the conduct determined to constitute a violation of this rule
and
explain the basis for the sanction imposed.
(d)
Inapplicability to discovery.Subdivisions (a) through (c) do not
apply to disclosures and discovery requests, responses, objections, and
motions
that are subject to the provisions of Rules 7026 through 7037.
(e)
Verification.Except as otherwise specifically provided by these
rules, papers filed in a case under Title 31 need not be verified..
(f)
Copies of signed or verified papers.When these rules require copies
of a signed or verified paper, it shall suffice if the original is
signed or
verified and the copies are conformed to the original.
Rule
9012. Oaths and Affirmations
(a)
Persons authorized to administer oaths.The following persons may
administer oaths and affirmations and take acknowledgments: a judge,
clerk,
assistant clerk, officer authorized to administer oaths in proceedings
before
the courts of the Federated States of Micronesia or under the laws of
the state
where the oath is to be taken, or a diplomatic or consular officer of
the
Federated States of Micronesia in any foreign country.
(b)
Affirmation in lieu of oath.When in a case under Title 31 an oath is
required to be taken, a solemn affirmation may be accepted in lieu
thereof.
Rule
9013. Motions
(a) Form
and Service.A request for an order, unless an application is
authorized by these rules, shall be by written motion, unless made
during a
hearing. The motion shall state, with particularity in a memorandum of
points
and authorities, the grounds therefor, and shall set forth the relief
or order
sought. Every written motion other than one which may be considered ex
parte
shall contain certification by the movant that a reasonable effort has
been
made to obtain the agreement or acquiescence of the other parties and
that no
agreement has been forthcoming and shall be served by the movant on the
trustee
or debtor in possession and on those entities specified by these rules
or, if
service is not required or the entities to be served are not specified
by these
rules, the moving party shall serve the entities the court directs.
(b)
Opposition.A party opposing the motion shall not later than 10 days
after the service of the motion upon that party, file and serve
responsive
papers. When a motion is opposed by affidavit, the affidavit shall be
served
with the responsive papers. The responsive papers shall consist of
either (1) a
memorandum of points and authorities, or (2) a written statement that
the party
does not oppose the motion.
(c)
Waiver and Consent.Failure by the moving party to file the
memorandum of points and authorities shall be deemed a waiver by the
moving
party of the motion; such failure by an opposing party shall constitute
a
consent to the granting of the motion.
Rule
9014. Contested Matters
(a)
Motion. In a contested matter not otherwise governed by these rules,
relief shall be requested by motion, and reasonable notice and
opportunity for
hearing shall be afforded the party against whom relief is sought. No
response
is required under this rule unless the court directs otherwise.
(b)
Service.The motion shall be served in the manner provided for
service of a summons and complaint by Rule 7004. Any paper served after
the
motion shall be served in the manner provided by FSM Civil Procedure
Rule 5(b)
.
(c)
Application of Part VII Rules.Except as provided in this rule, and
unless the court directs otherwise, the following rules shall apply:
7009,
7017, 7021, 7025, 7026, 7028-7037, 7041, 7042, 7052, 7054-7056, 7064,
7069,
7071. An entity that desires to perpetuate testimony may proceed in the
same
manner as provided in Rule 7027 for the taking of a deposition before
an
adversary proceeding. The court may at any stage in a particular matter
direct
that one or more of the other rules in Part VII shall apply. The court
shall
give the parties notice of any order issued under this paragraph to
afford them
a reasonable opportunity to comply with the procedures prescribed by
the order.
(d)
Testimony of Witnesses.Testimony of witnesses with respect to
disputed material factual issues shall be taken in the same manner as
testimony
in an adversary proceeding.
(e)
Attendance of Witnesses.The court shall provide procedures that
enable parties to ascertain at a reasonable time before any scheduled
hearing
whether the hearing will be an evidentiary hearing at which witnesses
may
testify. In a contested matter in a case under Title 31 not otherwise
governed
by these rules, relief shall be requested by motion, and reasonable
notice and
opportunity for hearing shall be afforded the party against whom relief
is
sought. No response is required under this rule unless the court orders
an
answer to a motion. The motion shall be served in the manner provided
for
service of a summons and complaint by Rule 7004, and, unless the court
otherwise directs, the following rules shall apply: 7021, 7025, 7026,
7028-7037, 7041, 7042, 7052, 7054-7056, 7062, 7064, 7069, and 7071. The
court
may at any stage in a particular matter direct that one or more of the
other
rules in Part VII shall apply. An entity that desires to perpetuate
testimony
may proceed in the same manner as provided in Rule 7027 for the taking
of a
deposition before an adversary proceeding. The clerk shall give notice
to the
parties of the entry of any order directing that additional rules of
Part VII
are applicable or that certain of the rules of Part VII are not
applicable. The
notice shall be given within the time necessary to afford the parties a
reasonable opportunity to comply with the procedures made applicable by
the
order
Rule
9016. Subpoena
FSM Civil
Procedure Rule 45 applies in cases under Title 31.
Rule
9017. Evidence
The FSM
Rules of Evidence and FSM Civil Procedure Rule Rules 43, 44 and
44.1 apply in cases under Title 31.
Rule
9018. Secret Confidential, Scandalous, or
Defamatory Matter
On motion
or on its own initiative, with or without notice, the court
may make any order which justice requires (1) to protect the estate or
any
entity in respect of a trade secret or other confidential research,
development, or commercial information, (2) to protect any entity
against
scandalous or defamatory matter contained in any paper filed in a case
under
Title 31, or (3) to protect governmental matters that are made
confidential by
statute or regulation. If an order is entered under this rule without
notice,
any entity affected thereby may move to vacate or modify the order, and
after a
hearing on notice the court shall determine the motion.
Rule
9019. Compromise and Arbitration
(a)
Compromise.On motion by the receiver or by the trustee and after
notice and a hearing, the court may approve a compromise or settlement.
Notice
shall be given to creditors, and the debtor as provided in Rule 2002
and to any
other entity as the court may direct.
(b)
Authority to compromise or settle controversies within classes.After
a hearing on such notice as the court may direct, the court may fix a
class or
classes of controversies and authorize the trustee or the receiver to
compromise or settle controversies within such class or classes without
further
hearing or notice.
(c)
Arbitration.On the parties' stipulation to any controversy affecting
the estate the court may authorize the matter to be submitted to final
and
binding arbitration.
Rule
9020. Contempt Proceedings
Rule 9014
governs a motion for an order of contempt
made by an interested party.
Rule
9021. Entry of Judgment
Except as
otherwise provided herein, FSM Civil Procedure Rule 58 applies
in cases under Title 31. Every judgment entered in an adversary
proceeding or
contested matter shall be set forth on a separate document. A judgment
is
effective when entered as provided in Rule 5003. The reference in FSM
Civil
Procedure Rule 58 to FSM Civil Procedure Rule 79(a) shall be read as a
reference to Rule 5003 of these rules.
Rule
9022. Notice of Judgment or Order
Immediately
on the entry of a judgment or order the clerk shall serve a notice
of entry in the manner provided in FSM Civil Procedure Rule 5(b) on the
contesting parties and on other entities as the court directs. Service
of the
notice shall be noted in the docket. Lack of notice of the entry does
not
affect the time to appeal or relieve or authorize the court to relieve
a party
for failure to appeal within the time allowed, except as permitted in
Rule
8002.
Rule
9023. New Trials; Amendment of Judgments
FSM Civil
Procedure Rule 59 applies in cases under Title 31, except as
provided in Rule 3008.
Rule
9024. Relief from Judgment or Order
FSM Civil
Procedure Rule 60 applies in cases under Title 31 but a motion
to reopen a case under Title 31 or for the reconsideration of an order
allowing
or disallowing a claim against the estate entered without a contest is
not
subject to the one year limitation prescribed in Rule 60(b) .
Rule
9025. Security: Proceedings Against Sureties
Whenever
Title 31 or these rules require or permit the giving of
security by a party, and security is given in the form of a bond or
stipulation
or other undertaking with one or more sureties, each surety submits to
the
jurisdiction of the court, and liability may be determined in an
adversary
proceeding governed by the rules in Part VII.
Rule
9026. Exceptions Unnecessary
FSM Civil
Procedure Rule 46 applies in cases under Title 31.
Rule
9027. Removal
The
procedures in FSM General Court Order 1992-2 shall be used to effect
removal. A notice of removal shall also be filed with the FSM Supreme
Court
trial division clerk located in the state where the state or municipal
court
civil action was pending if the FSM Supreme Court bankruptcy proceeding
is
pending in a different state.
Rule
9028. Judge's Disability
FSM Civil
Procedure Rule 63 applies in cases under Title 31.
Rule
9030. Jurisdiction and Venue Unaffected
These
rules shall not be construed to extend or limit the court's
jurisdiction or the venue of any matters therein.
Rule
9031. Masters Not Authorized
FSM Civil
Procedure Ruleh 53 does not apply in cases under Title 31.
Rule
9032. Effect of Amendment of FSM Rules of Civil
Procedure
The FSM
Rules of Civil Procedure which are incorporated by reference and
made applicable by these rules are the FSM Rules of Civil Procedure in
effect
on the effective date of these rules and as thereafter amended, unless
otherwise provided by the amendment or by these rules.
Rule
9035. Citation form.
These are
the Rules of Bankruptcy Procedure for the Supreme Court of the
Federated States of Micronesia and may be cited as: "FSM Bankr. R.
___."
Rule
9036. Notice by electronic transmission
Whenever
the clerk or some other person as directed by the court is
required to send notice by mail and the entity entitled to receive the
notice
requests in writing that, instead of notice by mail, all or part of the
information required to be contained in the notice be sent by a
specified type
of electronic transmission, the court may direct the clerk or other
person to
send the information by such electronic transmission, except, if the
type of
electronic transmission is facsimile transmission, the clerk will not
be
required by court order to send any notice to a party not in the same
state as
the clerk unless the recipient has agreed to pay for the telephone
charges.
Notice by electronic transmission is complete, and the sender shall
have fully
complied with the requirement to send notice, when the sender obtains
electronic confirmation that the transmission has been received.
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