Local Rule 6005-1: APPRAISERS AND AUCTIONEERS

RULE 6005-1. APPRAISERS AND AUCTIONEERS.

(a) Purchase Prohibited. Neither an auctioneer nor any officer, director, stockholder, insider, relative, agent, or employee of an auctioneer may directly or indirectly purchase, or have a financial interest in the purchase of, any property of a bankruptcy estate.

(b) Bond.

(1) General Requirement. An auctioneer may not render any services in a bankruptcy case until after the Court has entered an order approving the auctioneer's employment and the auctioneer has furnished (at their expense) a surety bond in favor of the United States of America in each estate. Surety bonds must be approved, and in such sum as may be set, by the Court. Approval of a surety bond is conditioned upon:

(A) the faithful and prompt accounting of all monies and property which may come into the possession of the auctioneer;

(B) compliance with all rules, orders, and decrees of the Court; and

(C) the faithful performance of duties in all respects.

(2) Blanket Bond. In lieu of a bond in each case, an auctioneer may file a blanket bond covering all cases in which the auctioneer may act. A blanket bond must be in an amount sufficient to cover the aggregate appraised value of all property to be sold.

(c) Disposition of Proceeds of Sale. Unless the Court orders otherwise, no later than 21 days after the date of sale, the auctioneer must turn over to the trustee, or deposit in a separate interest-bearing account, a sum equal to the proceeds of sale minus the auctioneer's reimbursable expenses. The trustee may not disburse any commission or reimbursement to the auctioneer until the Court enters an order approving the auctioneer's payment, as provided in paragraph (e) below. The Court retains jurisdiction to review the auctioneer's reimbursable expenses for validity and reasonableness. In the event the Court determines that a portion of the expenses deducted from the proceeds of sale is inappropriate or unreasonable, the auctioneer will be required to deliver such funds to the trustee immediately.

(d) Report of Sale. The auctioneer must file a report with the Clerk and serve a copy of the report on the United States Trustee and the case trustee (if any), within 90 days after the conclusion of the sale. The report of sale must set forth:

(1) the time, date, place, and format of sale;

(2) a statement of the manner and extent of advertising for the sale and the availability of the items for inspection prior to the sale;

(3) the terms and conditions of sale that were read to the audience immediately prior to the commencement of the sale;

(4) the sign-in sheet that lists the people who were present, either in person or remotely, at the sale;

(5) the names of all purchasers and the items purchased by each of them;

(6) the gross amount realized from the sale;

(7) the amount of sales tax collected;

(8) an itemized statement of commissions sought, and disbursements made, under this Rule, including the name of the payee and the original receipts or canceled checks, or copies thereof, substantiating the disbursements; if the canceled checks are not available at the time the report is filed, then the report must so state, and the canceled checks must be filed as soon as they become available; where labor charges are included, the report must specify the names of the persons employed, the hourly wage for each employee, and the number of hours worked by each employee;

(9) if the auctioneer has a blanket bond covering all sales conducted, the auctioneer must also include an explanation of how the bond expenses charged to the estate were allocated;

(10) the disposition of any items for which there was no bid; and

(11) such other information as the Court or the United States Trustee may reasonably request.

(e) Application for Commissions and Expenses.

(1) Notice of Application; Inclusion of Report. An auctioneer must apply to the Court for approval of commissions and expenses on not fewer than 21 days' notice and must have filed the report referred to in paragraph (d) above prior to filing the application for commissions and expenses.

(2) Calculation of Commission. The maximum allowable commissions on the gross proceeds of each sale are as follows:

(A) 10% on first $100,000 or less;

(B) 5% on any amount in excess of $100,000 up to $200,000; and

(C) 2.5% on any amount in excess of $200,000.

(3) Reimbursement of Expenses. The auctioneer will be reimbursed for reasonable and necessary expenses directly related to the sale (including the bond premium or allocable portion of the blanket bond premium) and costs attributable to the sale (including labor, printing, advertising, and insurance, but excluding worker's compensation, social security, unemployment insurance, or other payroll taxes). Unless the Court orders otherwise, an auctioneer will be reimbursed for a blanket bond at a rate of $100 per case or 10% of the gross proceeds from an auction, whichever is less, minus any amounts previously reimbursed for the bond. If the case trustee hires the auctioneer to transport goods, the auctioneer will also be reimbursed for reasonable costs associated with that transport.