Local Rule RULE 6005-1: APPRAISERS AND AUCTIONEERS

RULE 6005-1 APPRAISERS AND AUCTIONEERS

(a) Compensation of Auctioneers. An auctioneer appointed by the Court shall be allowed compensation and reimbursement of expenses as follows, unless the Court orders otherwise:

(1) Maximum Commissions. The allowable commissions, whether in the form of a "buyer's premium," "buyer's surcharge," or "auctioneer's commission," or by any other nomenclature, shall be determined and set by the Court in the Order approving employment of the auctioneer upon proper application demonstrating that the proposed commission is reasonable and customary for the kind of proposed auction of the type and amount of property to be sold. In no event, however, shall the total of all allowable commissions exceed 15% of gross proceeds of sale. An auctioneer may, if provided in the Order approving employment of the auctioneer upon proper application, utilize the services of a third-party online bidding service and pass through for payment by the successful online bidder an online bidding charge not to exceed an additional 3% of gross proceeds of sale from such successful online bid.

(2) Expenses. The auctioneer shall be reimbursed for the reasonable and necessary expenses directly related to the sale, including bond or blanket bond premium costs attributable to said sale, but excluding worker's compensation, social security, unemployment insurance or other payroll taxes. The auctioneer's application for employment provided to the Court shall contain a proposed itemized budget setting forth a good faith estimate of the reasonable and necessary expenses expected to be incurred by the auctioneer. An auctioneer shall be reimbursed for a blanket bond at the rate of $100 per case or 10% of the gross proceeds from an auction, whichever is less, less any amounts previously reimbursed for said bond, unless the Court orders otherwise.

(b) Bond. An auctioneer employed with Court approval shall not act until a surety bond in favor of the United States of America is provided in each estate, at the auctioneer's expense. The bond shall be approved by the Court and shall be in an amount sufficient to cover the aggregate appraised value of all property to be sold, or in such sum as may be fixed by the Court, conditioned upon:

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

(2) Compliance with all rules, orders, and decrees of the Court; and

(3) The faithful performance of duties in all respects in all cases in which the auctioneer may act.

(c) Report of Sale. The auctioneer shall file a report with the Clerk and serve the United States trustee within thirty (30) days after conclusion of the sale. The report of sale shall set forth:

(1) The time, date and place of sale;

(2) The gross amount realized by the sale;

(3) An itemized statement of commissions sought under this Rule and disbursements made, including the name of the payee and the original receipts or cancelled checks, or copies thereof, substantiating the disbursements. Where labor charges are included, the report shall specify the name(s) of the person(s) employed, the hourly wage, and the number of hours worked by each person. If the cancelled checks are not available at the time the report is filed, then the report shall so state, and the cancelled checks shall be filed as soon as they become available;

(4) Where the auctioneer has a blanket insurance policy covering all sales conducted for which original receipts and cancelled checks are not available, an explanation of how the insurance expense charged to the estate was allocated;

(5) The names of all purchasers at the sale;

(6) The sign-in sheet, indicating the number of people attending the sale;

(7) The disposition of any items for which there were no bid;

(8) The terms and conditions of sale read to the audience immediately prior to the commencement of the sale;

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

(10) The amount of sales tax collected; and

(11) Such other information as the Court may require.

(d) Proceeds of Sale. Unless the Court orders otherwise, the proceeds of sale less the auctioneer's reimbursable expenses, shall be turned over to the trustee as soon as practicable and not later than fourteen (14) days from the date of sale. The Court retains the jurisdiction to review the auctioneer's reimbursable expenses. In the event the Court determines that a portion of the expenses deducted from the proceeds of the sale are unreasonable or unnecessary, the auctioneer shall be required to return those funds to the trustee.

(e) Application for Commissions and Expenses. An auctioneer shall apply to the Court for approval of allowable commissions and expenses on not less than twenty-one (21) days' notice as required by Fed. R. Bankr. P. 2002 and in conformance with LBR 2002-1. No such application shall be granted unless (i) the report referred to in paragraph (c) has been filed and (ii) the auctioneer has complied with all other provisions of this Rule.

(f) Purchase Prohibited by Auctioneer, Appraiser, and/or Agent. An auctioneer or officer, director, stockholder, agent, or employee of an auctioneer shall not purchase, directly or indirectly, or have a financial interest in, the purchase of any property of the estate which the auctioneer has been employed to sell. Likewise, an appraiser or officer, director, stockholder, agent, or employee of an appraiser shall not purchase directly or indirectly, or have a financial interest in, the purchase of any property of the estate that the appraiser has been employed to appraise.