USC - Soliciting and Voting Proxies in a Chapter 7 Case

Rule 2006. Soliciting and Voting Proxies in a Chapter 7 Case

(a)Applicability. This Rule 2006 applies only in a Chapter 7 case.

(b) Definitions.

(1)Proxy. A “proxy” is a written power of attorney that authorizes an entity to vote the claim or otherwise act as the holder’s attorney-in-fact in connection with the administration of the estate.

(2)Soliciting a Proxy. “Soliciting a proxy” means any communication by which a creditor is asked, directly or indirectly, to give a proxy after or in contemplation of a Chapter 7 petition filed by or against the debtor. But such a communication is not considered soliciting a proxy if it comes from an attorney to a claim owner who is a regular client or who has requested the attorney’s representation.

(c)Who May Solicit a Proxy. A proxy may be solicited only in writing and only by:

(1) a creditor that, on the date the petition was filed, held an allowable unsecured claim against the estate;

(2) a committee elected under § 705;

(3) a committee elected by creditors that hold a majority of claims in number and in total amount and that:

(A) have claims that are not contingent or unliquidated;

(B) are not disqualified from voting under § 702(a); and

(i) all creditors with claims over $500—or the 100 creditors with the largest claims—had at least 7 days’ written notice; and

(ii) written minutes are available that report the voting creditors’ names and the amounts of their claims; or

(4) a bona fide trade or credit association, which may solicit only creditors who, on the petition date:

(A) were its members or subscribers in good standing; and

(B) held allowable unsecured claims.

(d)When Soliciting a Proxy Is Not Permitted. This Rule 2006 does not permit soliciting a proxy:

(1) for any interest except that of a general creditor;

(2) by the interim trustee; or

(3) by or on behalf of:

(A) a custodian;

(B) any entity not qualified to vote under § 702(a);

(D) a transferee holding a claim for collection purposes only.

(e)Duties of Holders of Multiple Proxies. Before voting begins at any meeting of creditors under § 341(a)—or at any other time the court orders—a holder of 2 or more proxies must file and send to the United States trustee a verified list of the proxies to be voted and a verified statement of the pertinent facts and circumstances regarding each proxy’s execution and delivery. The statement must include:

(1) a copy of the solicitation;

(2) an identification of the solicitor, the forwarder (if the forwarder is neither the solicitor nor the claim owner), and the proxyholder—including their connections with the debtor and with each other—together with:

(A) if the solicitor, forwarder, or proxyholder is an association, a statement that the creditors whose claims have been solicited and the creditors whose claims are to be voted were, on the petition date, members or subscribers in good standing with allowable unsecured claims; and

(B) if the solicitor, forwarder, or proxyholder is a committee of creditors, a list stating:

(i) the date and place the committee was organized;

(ii) that the committee was organized under (c)(2) or (c)(3);

(iii) the committee’s members;

(iv) the amounts of their claims;

(v) when the claims were acquired;

(vi) the amounts paid for the claims; and

(vii) the extent to which the committee members’ claims are secured or entitled to priority;

(3) a statement that the proxyholder has neither paid nor promised any consideration for the proxy;

(4) a statement addressing whether there is any agreement—and, if so, giving its particulars—between the proxyholder and any other entity to:

(A) pay any consideration related to voting the proxy; or

(B) share with any entity (except a member or regular associate of the proxyholder’s law firm) compensation that may be allowed to:

(i) the trustee or any entity for services rendered in the case; or

(ii) any person employed by 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 claim owner—a statement signed and verified by the solicitor or forwarder:

(A) confirming that no consideration has been paid or promised for the proxy;

(B) addressing whether there is any agreement—and, if so, giving its particulars—between the solicitor or forwarder and any other entity to pay any consideration related to voting the proxy or to share with any entity (except a member or regular associate of the solicitor’s or forwarder’s law firm) compensation that may be allowed to:

(i) the trustee or any entity for services rendered in the case; or

(ii) any person employed by the estate; and

(6) if the solicitor, forwarder, or proxyholder is a committee, a statement signed and verified by each member disclosing the amount and source of any consideration paid or to be paid to the member in connection with the case, except a dividend on the member’s claim.

(f)Enforcing Restrictions on Soliciting Proxies. On a party in interest’s motion or on its own, the court may determine whether there has been a failure to comply with this Rule 2006 or any other impropriety related to soliciting or voting a proxy. After notice and a hearing, the court may:

(1) reject a proxy for cause;

(2) vacate an order entered because a proxy was voted that should have been rejected; or

(3) take other appropriate action.

(As amended Mar. 30, 1987, eff. Aug. 1, 1987; Apr. 30, 1991, eff. Aug. 1, 1991; Mar. 26, 2009, eff. Dec. 1, 2009; Apr. 2, 2024, eff. Dec. 1, 2024.)