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142 VI. REORGANIZATION (CHAPTER 11) A. Debtor-in-Possession As discussed in Chapter I.A. above, a debtor becomes a "debtor-in-possession" upon filing a voluntary petition under Chapter 11 or, in an involuntary Chapter 11 case, upon entry of the order for relief, and will continue as a "debtor-in-possession" for the duration of the Chapter 11 case unless and until a trustee is appointed. 11 U.S.C. § 1101(1). A debtor-in-possession generally enjoys the rights and powers of a Chapter 11 trustee and is required to perform the duties and obligations of a Chapter 11 trustee (except for investigative duties). 11 U.S.C. § 1107(a). In the case of a Chapter 11 debtor that is a corporation or other business, existing management will generally remain in place (subject to certain exceptions discussed in the following Section). It is also worth noting that the debtor-in-possession is the only party with the right to file a plan within the first 120 days of a bankruptcy case (with certain exceptions). This exclusivity period can be increased or reduced by the court for cause, on request of a party in interest, and after notice and a hearing. 11 U.S.C. § 1121. 78 B. Chapter 11 Trustee and Examiner At the request of a party in interest or the U.S. Trustee, and after notice and a hearing, the court must order the appointment of a Chapter 11 trustee (replacing the debtor-in-possession) to operate the business and manage the estate and reorganization effort (i) upon a showing of cause, including fraud, dishonesty, incompetence or gross mismanagement by current management (either before or after the bankruptcy filing), (ii) if such appointment is in the interests of creditors, equity security holders and other interests of the estate, or (iii) if grounds exist to dismiss or convert the case but appointment of a trustee (or examiner) is in 78 See discussion of "Exclusivity" in Chapter VI.F.1. below.

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