S.D. Tex. BLR 4002-1 — Duties of Debtor-in-possession

High confidence· verified September 26, 2026Local Rules

Summary

S.D. Tex. BLR 4002-1 — Duties of Debtor-in-possession: the court's own rule, verbatim from Bankruptcy Local Rules (Effective March 3, 2026), official PDF, sha-custodied. Court-level requirement: applies in every case before the U.S. Bankruptcy Court for the Southern District of Texas alongside the Federal Rules of Bankruptcy Procedure and any judge-specific procedures.

Requirement

(a) A debtor in possession is responsible for strict compliance with the Bankruptcy Code, Federal Rules of Bankruptcy Procedure, and standing orders. Counsel for the debtor-in-possession is responsible for instructing the debtor about the U. S. trustee guidelines for a debtor-in-possession and insuring compliance with those guidelines. (b) The debtor, its officers, and agents hold and manage the debtor’s assets as fiduciaries for the estate; they must strictly comply with court orders and Bankruptcy Code §§ 363 and 1107. The debtor must prevent the depletion of the assets of the business during the proceedings, and it must notify its counsel immediately of a depletion or potential depletion. (c) If the debtor becomes aware of facts indicating that the continued operation of its business may not be in the best interest of the creditors or of the estate, it must immediately notify its counsel, who may immediately notify the court and recommend a solution. (d) The debtor may not use property of the estate to pay any prepetition unsecured obligation except on order. (e) The debtor must not transfer (sell, give, move, encumber) an asset outside of the ordinary course of business except on order. (f) The debtor must not incur administrative and priority expenses unless funds are reasonably expected to be generated to pay them. (g) The debtor must comply fully with Title 11's tax provisions, with the deposit requirements of the Internal Revenue Code and Regulations, and with all state tax laws. (h) The debtor must not use cash collateral without prior written consent of the secured creditor or an order. (i) This list of duties is not exclusive, and it does not exclude unenumerated obligations imposed by law. Counsel for the debtor-in-possession is responsible to instruct the debtor of this rule immediately on filing the case. (j) Counsel may advise the court of any knowing violation by debtor.

Source of truth

(a) A debtor in possession is responsible for strict compliance with the Bankruptcy Code, Federal Rules of Bankruptcy Procedure, and standing orders. Counsel for the debtor-in-possession is responsible for instructing the debtor about the U. S. trustee guidelines for a debtor-in-

Official source: Bankr. S.D. Tex. — Local Rules (U.S. Bankruptcy Court, Southern District of Texas)
Source health: Healthy · checked October 4, 2026
Effective date: March 3, 2026
Last verified: September 26, 2026benchpath-appfed-rules-2026-09-25

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