What are the grounds for the appointment of a trustee in a Chapter 11 case?
There are three grounds for the appointment of a trustee in a Chapter 11 case: a trustee may be appointed for cause, if the appointment would be in the best interests of creditors, or if grounds exist to dismiss the case but the court determines that the appointment of a trustee, rather than dismissal, is in the best interests of creditors and the business. Cause for the appointment of a trustee includes substantial or continuing business or assert loss, gross mismanagement of the affairs of the debtor by current management, failure to comply with orders of the court, and several other grounds. A trustee is not appointed in most small business Chapter 11 cases.
