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Local Bankr.R.6005-1

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Local Bankr. R. 6005-1 Employment of Auctioneers.

(a)      Unless otherwise ordered by the Court, the following shall apply to the employment of all auctioneers and the conduct of auctions.

(b)      The employment of an auctioneer shall be submitted to the Court for approval upon application setting forth:

(1)      The need for an auctioneer's services;

(2)      A description of the property to be sold, its estimated value, and the location thereof;

(3)      How the auctioneer is to be paid, and, if payment is to be made from assets of the estate, whether the estate will have adequate funds with which to pay the auctioneer's fee;

(4)      If the items to be auctioned constitute collateral, entirely or in part, whether or not the party claiming a security interest in such collateral has agreed to pay any or all of the auctioneer's expenses;

(5)      To the extent additional compensation or reimbursement of assistants is sought, how many assistants will be required to help the auctioneer and why such assistance is required, a statement by the trustee in support of the number required and the expense to be incurred for each assistant, based upon an hourly fee; and

(6)      A bond obtained for the purpose of the auction in an amount such as will exceed the estimated value of the property to be sold by at least twenty-five percent (25%), a copy of which shall be attached to the application to employ.

(c)      An auctioneer employed with Court approval shall not act until he or she gives in each estate, at his or her own expense, a surety bond in favor of the United States of America, to be approved by and 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 his or her possession as auctioneer;

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

(3)      The faithful performance of his or her duties in all respects.

(d)     Said bond shall contain a provision that it may not be canceled or terminated without sixty (60) days’ notice being given to the Clerk and the United States Trustee. In lieu of a bond in each case, an auctioneer may be permitted to file a blanket bond covering all cases in which he or she may act. Such blanket bond shall be in favor of the United States of America, shall be in the sum of one million dollars ($1,000,000.00), and shall be conditioned for each estate on the same terms as bonds in separate estates.

(e)     Compensation and Expenses.

(1)      Any allowance of compensation and reimbursement of expenses to an auctioneer shall be paid only upon proper application and subject to the approval of the Court.

(2)      An auctioneer shall be reimbursed for reasonable and necessary expenses directly related to the sale, including printing, advertising, insurance, and bond costs. Where the auctioneer has a blanket bond, the auctioneer may be reimbursed a proportionate amount of the costs, based upon the value of the assets sold by the auctioneer in the particular estate. When directed by the trustee to transport goods, the auctioneer shall be reimbursed for expenditures related thereto. No travel expenses shall be allowed except as ordered by the Court. The auctioneer may be reimbursed for his or her expenses only if the application for reimbursement is supported by a sworn affidavit, setting forth the specific expenses incurred and the necessity for such. Vouchers, invoices, receipts, or other appropriate supporting documentation shall accompany the application. Where disbursements were made for advertising, copies of the actual advertisements shall be attached to the affidavit.

(f)      A person shall not at any time, directly or indirectly, designate or refer to himself or herself as "Official United States Auctioneer," or as "Official Bankruptcy Auctioneer," or use any similar title or designation which states expressly or by implication that such person is an officer of the United States District Court or Bankruptcy Court, or that such person holds any permanent designation by the Court as an auctioneer.

(g)      Every auctioneer acting hereunder shall at all times keep proper records of all transactions and shall submit a report of each sale which shall include the following information:

(1)      The time and place of sale;

(2)      The gross amount of the sale and when property is sold in lots, the items in each lot and the amount received for each lot, with the name of the purchaser, as well as any bulk bid;

(3)      An itemized statement of the expenditures, disbursements, and commissions allowable under this Rule, together with appropriate vouchers as described in paragraph (e)(2) above; and

(4)      Whenever articles are sold free and clear of liens, with the liens to attach to the proceeds, the articles and liens shall be itemized separately.

(h)     Except as otherwise ordered by the Court, a trustee shall not delegate any of his or her fiduciary responsibilities to an auctioneer.

(i)      The sanctions that may be imposed for violation of this Rule, include, but are not limited to, the disqualification of the person from future employment on behalf of bankruptcy estates.