Quoted from flynnibus:
If the trustee uncovers illegal behavior, etc... they turn those findings over to the appropriate procesutors and they decide if they will pursue a case.
The lawyer on the phone basically said 'we have seen stinky stuff, I can't make any statement on if charges will be pursued... but we are OBLIGATED to report any signs of illegal activity they find'
And he stressed that
Just for clarification, the term "trustee" can get a little confusing in bankruptcy, because often two parties in a bankruptcy case will carry the word "trustee" in their job title.
On Kevin's bankruptcy case, there are actually three different lawyers working directly or indirectly on behalf of creditors:
1) Sean M. Cowley, Trial Attorney for the U.S. Trustee
2) Randall L. Frank, Chapter 7 Trustee
3) Kieth M. Nathanson, Special Litigation Counsel for the Chapter 7 Trustee
1) The United States Trustee ("U.S. Trustee" or "UST") is different than the Chapter 7 Trustee assigned to the bankruptcy case.
In Chapter 7 cases, the U.S. Trustee acts like a parliamentarian for the overall bankruptcy process, litigating issues that affect the integrity of the bankruptcy system. For example:
a) Arguing that granting the debtor a bankruptcy discharge would constitute a "substantial abuse" of the bankruptcy process;
b) Taking legal action to enforce the requirements of the Bankruptcy Code and to prevent fraud and abuse; and
c) Referring matters for investigation and criminal prosecution when appropriate.
Not surprisingly, in light of the above, the Office of the U.S. Trustee is actually part of the U.S. Department of Justice.
Sean M. Cowley, the Trial Attorney for the U.S. Trustee, was the attorney on the phone at yesterday's hearing. Sean's practice focuses on §727 denial of discharge litigation, Chapter 9 issues and litigation, §707(a) dismissals for bad faith, attorney misconduct issues under §526, criminal referrals and prosecutions for bankruptcy-related crimes, and appeals at both the district court and circuit court levels.
Given Sean's key role in drafting the Stipulation that Kevin signed after the hearing, agreeing to the denial of a bankruptcy discharge of Kevin's pre-petition debt, Sean has been effectively working indirectly on behalf of the creditors.
2) Randall L. Frank is the Chapter 7 Trustee for this case. Mr. Frank is one of the Chapter 7 panel trustees covering the Eastern District of Michigan. He is based in Bay City, Michigan, and was assigned, on a blind rotation basis, to Kevin's case. Mr. Frank is working directly to maximize proceeds for Kevin's creditors, but wasn't a visible player at the last two hearings, because he was represented by Keith Nathanson at the hearing. (Mr. Frank successfully petitioned the court for Keith's appointment as his Special Litigation Counsel.)
3) Keith M. Nathanson was appointed by Judge Opperman to work for Mr. Frank (Chapter 7 Trustee) as the Trustee's Special Litigation Counsel. Keith was appointed to this role based on his prior knowledge of Kevin's financials from his pre-petition litigation on behalf of some of the SkitB creditors.
All three of these attorneys are playing a key role for creditors, whether visible or behind-the-scenes, and their work to date has been commendable.