We use cookies to improve security, personalize the user experience,
enhance our marketing activities (including cooperating with our marketing partners) and for other
business use.
Click "here" to read our Cookie Policy.
By clicking "Accept" you agree to the use of cookies. Read less
Understanding the Concept of a Disinterested Person in Law
Definition & Meaning
A disinterested person is an individual who has no personal stake in a legal matter involving a debtor. Specifically, this means they are not a creditor, equity security holder, or insider. Additionally, they must not have served as a director, officer, or employee of the debtor within the two years leading up to the filing of a petition. Importantly, their interests should not conflict with those of the estate or any group of creditors or equity holders due to any connection with the debtor.
Table of content
Legal Use & context
The term "disinterested person" is commonly used in bankruptcy and insolvency law. It is essential for ensuring that individuals involved in the management of a debtor's estate are impartial and do not have conflicting interests. This concept is crucial in various legal practices, particularly in bankruptcy proceedings, where the integrity of the process depends on the involvement of unbiased individuals. Users can manage related forms and procedures with tools like US Legal Forms, which provide templates drafted by experienced attorneys.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A person who has no financial ties to a company that has filed for bankruptcy and has not worked for that company in the last two years may be considered a disinterested person. This individual could potentially serve as a trustee in the bankruptcy case.
Example 2: A former employee of a debtor company who left their position three years ago and has no current financial interest in the company would qualify as a disinterested person in bankruptcy proceedings. (hypothetical example)
Relevant laws & statutes
The definition of a disinterested person is outlined in the U.S. Bankruptcy Code, specifically in 11 U.S.C. § 101. This statute provides the legal framework for determining who qualifies as disinterested in bankruptcy cases.
State-by-state differences
State
Variations
California
Similar definition, but additional state regulations may apply.
New York
Definition aligns closely with federal law, but local rules may introduce additional requirements.
Texas
Generally follows federal guidelines with minor state-specific nuances.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Key Differences
Disinterested Person
An individual without a personal stake in a debtor's case.
Must meet specific criteria regarding relationships with the debtor.
Interested Person
An individual or entity with a financial stake in the debtor's case.
Has a direct or indirect interest that could affect impartiality.
Creditor
A person or entity to whom the debtor owes money.
Always has a financial interest, disqualifying them as disinterested.
Common misunderstandings
What to do if this term applies to you
If you believe you qualify as a disinterested person in a bankruptcy case, you should consider documenting your lack of interest in the debtor's affairs. It may be beneficial to consult with a legal professional to ensure compliance with all requirements. Additionally, you can explore US Legal Forms for templates that can assist you in managing related legal processes effectively.
Find the legal form that fits your case
Browse our library of 85,000+ state-specific legal templates.