Answer (B) is correct . In a Chapter 11 reorganization, the court has limited power to appoint a trustee. Instead, to better accomplish the rehabilitative aspirations of a reorganization, a firm seeking protection under Chapter 11 may be permitted to operate its own business as a debtor-in-possession. A strong presumption exists that a debtor-in- possession should be permitted to continue to operate the business unless there is evidence of incompetence or mismanagement on the part of the debtor. A debtor-in-possession has basically all the same rights and duties as a trustee but does not receive special compensation for performing the function.
Answer (A) is incorrect because The court may sometimes appoint a trustee but does not serve as trustee.
Answer (C) is incorrect because The committee consults with the court, the debtor, and the trustee; investigates the debtor’s affairs; and participates in formulating the plan of reorganization.
Answer (D) is incorrect because An examiner may be appointed to examine allegations of fraud, misconduct, or mismanagement.
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