Chapter 11 Reporting: Monthly Operating Reports, Budget-to-Actual and U.S. Trustee Fees
/Once a company files Chapter 11, its finances are reported in public, every month, to the court and the U.S. Trustee, and usually every week to its lender. Late or unreliable reports are one of the fastest ways to lose credibility in a case.
How do I fill out a Chapter 11 monthly operating report?
Small business and Subchapter V debtors use Official Form 425C until a plan is confirmed; other Chapter 11 debtors use UST Form 11-MOR. Report the month's cash receipts and disbursements, bank balances, income statement, balance sheet, and post-petition payables and taxes. Reports are filed every month, by the deadline the U.S. Trustee and local rules set for your district.
The U.S. Trustee's operating report page has the current forms and instructions. Practical points:
- Cash ties to the bank. Receipts and disbursements must reconcile to the bank statements for every debtor-in-possession account.
- Post-petition only. The report shows activity since the filing. Unpaid post-petition bills and taxes are a red flag to the trustee.
- Every entity. In a jointly administered case, each debtor files its own report.
- Bank statements are filed with Form 11-MOR only if the U.S. Trustee requests them; Form 425C asks for them if available.
- Notes matter. A short explanation of unusual items saves questions later.
What is a budget-to-actual variance report?
It compares actual cash receipts and payments with the court-approved budget, line by line, usually every week or every other week. Cash collateral and DIP orders typically require it and set how far actual results may stray from the budget before the lender can act.
Worked example (illustrative figures)
| Week ending | Budget | Actual | Variance | Variance % |
|---|---|---|---|---|
| Receipts | 120,000 | 104,000 | −16,000 | −13% |
| Payroll | 55,000 | 56,500 | −1,500 | −3% |
| Suppliers | 40,000 | 31,000 | +9,000 | +23% |
| Net cash flow | 25,000 | 16,500 | −8,500 | −34% |
The variance report explains the gap: is it timing (a customer paid two days late) or permanent (a lost customer)? Timing differences reverse; permanent ones mean the budget has to be revised and, often, the lender consulted.
How are U.S. Trustee quarterly fees calculated?
They are based on the debtor's total disbursements in each calendar quarter, on a tiered schedule set by statute (28 U.S.C. § 1930(a)(6)). They are paid every quarter and accrue until the case is closed, converted or dismissed. Subchapter V cases do not pay them (U.S. Trustee).
Because the fee follows disbursements, it belongs in the cash budget from day one, and it keeps accruing after confirmation until the final decree.
Checklist
- Correct form for the case type (UST Form 11-MOR or Official Form 425C)
- Every debtor-in-possession bank account reconciled
- Post-petition payables and taxes current
- Budget-to-actual report on the schedule the cash order sets
- Quarterly fee in the budget and paid on time
- After confirmation: UST Form 11-PCR quarterly until the final decree, conversion or dismissal (small business and Subchapter V debtors: ask the local U.S. Trustee)
Questions owners ask
What happens if reports are late? Failing to file reports or pay fees on time is cause to convert or dismiss the case (§ 1112(b)), and lenders may treat a missed variance report as a default under the cash order.
Can our bookkeeper prepare the monthly operating report? Often, with senior review. The difficulty is usually not the form; it is books that are behind or that mix pre- and post-petition activity. Our article Chapter 11 financial reporting when the books are unreliable covers that case.
Does reporting stop when the plan is confirmed? No. Most debtors file a post-confirmation report (UST Form 11-PCR) every quarter until the final decree, conversion or dismissal. Small business and Subchapter V debtors should ask the local U.S. Trustee which report applies.
General information, not legal advice. Your counsel and the U.S. Trustee's guidelines govern your case.