Local Rule 7067-1: DEPOSITING FUNDS WITH THE COURT

LOCAL RULE 7067-1: DEPOSITING FUNDS WITH THE COURT a. Receipt of Funds.

1. No money shall be sent to the Court or its officers for deposit into the Court's registry without court order signed by the judge in the case or proceeding.

2. The order of deposit must be prepared by the party seeking the deposit or transfer and state the exact amount to be deposited, that the funds are to be deposited into an interest-bearing account, and that the funds will remain on deposit until further order of the court.

3. The party making the deposit or transferring funds to the Court's registry shall personally serve the order permitting the deposit or transfer on the Clerk of Court. The Clerk of Court must take reasonable steps to deposit the money pursuant to that order as soon as practicable following service. Failure of the party making the deposit or transferring funds to comply with this section releases the Clerk of Court from liability for loss of interest upon the money subject to the order of deposit.

4. All monies ordered to be paid to the Court or received by its officers in any case pending or adjudicated shall be deposited with the Treasurer of the United States in the name and to the credit of this Court pursuant to 28 U.S.C. § 2041 through depositories designated by the United States Treasury to accept such deposit on its behalf.

5. The funds must be submitted to the Clerk of Court by certified check or money order made payable to "U.S. Bankruptcy Court" in the exact amount specified in the court order.

b. Investment of Registry Funds.

1. Where, by order of the Court, funds on deposit with the Court are to be placed in some form of interest-bearing account or invested in a court-approved, interest-bearing instrument in accordance with Rule 67 of the Federal Rules of Civil Procedure, the Court Registry Investment System (CRIS), administered by the Administrative Office of the United States Courts under 28 U.S.C. § 2045, shall be the only investment mechanism authorized.

2. IRS regulations require special handling for "Disputed Ownership Funds" (DOF), as defined in 26 CFR § 1.468B-9 (Disputed ownership funds). Unless otherwise ordered by the Court, interpleader funds that qualify as a DOF under IRS regulations (e.g., eligible cases filed under 28 U.S.C. § 1335 or Fed. R. Civ. P. 22) shall be deposited in the DOF Pool established within the CRIS and administered by the Administrative Office of the United States Courts, which shall be responsible for meeting all DOF tax administration requirements.

3. The Director of the Administrative Office of the United States Courts is designated as custodian for all CRIS funds. The Director or the Director's designee shall perform the duties of custodian. Funds held in the CRIS remain subject to the control and jurisdiction of the Court.

4. Money from each case deposited in the CRIS will be "pooled" together with those on deposit with the Treasury to the credit of other courts in the CRIS and used to purchase Government Account Series (GAS) securities through the Bureau of Public Debt, which will be held at Treasury, and in an account in the name and to the credit of the Director of the Administrative Office of the United States Courts. The pooled funds will be invested in accordance with the principles of the CRIS Investment Policy as approved by the Registry Monitoring Group.

5. An account will be established in the CRIS Liquidity Fund titled in the name of the case giving rise to the deposit invested in the fund. Income generated from fund investments will be distributed to each case based on the ratio each account's principal and earnings has to the aggregate principal and income total in the fund after the CRIS fee has been applied. Reports showing the interest earned and the principal amounts contributed in each case will be prepared and distributed to each court participating in the CRIS and made available to litigants and/or their counsel.

6. For each interpleader case, an account shall be established in the CRIS Disputed Ownership Fund, titled in the name of the case giving rise to the deposit invested in the fund. Income generated from fund investments will be distributed to each case after the DOF fee has been applied and tax withholdings have been deducted from the fund. Reports showing the interest earned and the principal amounts contributed in each case will be available through the FedInvest/CMS application for each court participating in the CRIS and made available to litigants and/or their counsel. On appointment of an administrator authorized to incur expenses on behalf of the DOF in a case, the case DOF funds should be transferred to another investment account as directed by court order.

c. Fees and Taxes.

1. As custodian for all CRIS funds, the Director of the Administrative Office of the United States Courts may assess fees based up on the Bankruptcy Court Miscellaneous Fee Schedule, withhold and pay federal taxes on Disputed Ownership Funds, and distribute income from fund investments after assessing fees.

d. Disbursement of Registry Funds.

1. The Clerk of Court will disburse registry funds only pursuant to a court order. The disbursement order shall state the name and taxpayer identification number for each party who is to receive funds,1 the mailing address of each party, and the amount each party is to receive.

2. The party must personally serve the signed disbursement order on the Clerk of Court and complete Form AO 213 and/or AO 213P.2 3. Funds will not be disbursed until after the time for appeal of the related judgment or order has expired, or upon approval by the Court of a written stipulation signed by all parties.

Notes:

(2025) The rule was revised to provide more guidance on the depositing and investment of funds with the Court.

1 Due to privacy protection of court filings under Fed. R. Bankr. P. 9037, a party's social security number may be sent to the Court's finance department instead of included in the disbursement order. 2 Available at http://www.uscourts.gov/services-forms/forms.