Should the Federal rules of bankruptcy procedure be amended to expressly authorize United States district and bankruptcy courts to appoint a special master in an appropriate...

University of Memphis Law Review, The, Winter 2001 by Clift, R Spencer III

Former Bankruptcy Rules 513 and 102(b) allowed district judges to appoint a special master in a bankruptcy case in the event the district judge retained the bankruptcy case or withdrew the reference of the case from the bankruptcy court.64 The fact that the former bankruptcy rules of procedure allowed for district judges to appoint special masters might suggest that the scope of Federal Rule of Bankruptcy Procedure 9031 is far too broad.65 Stated another way, one may reasonably question whether Rule 9031, a procedural rule, really intended to strip the United States district court of its equitable and inherent power of appointing a special master in an appropriate, complex, and rare bankruptcy case or proceeding.

IV. WHY SPECIAL MASTERS SHOULD BE APPOINTED IN APPROPRIATE AND RARE BANKRUPTCY CASES OR PROCEEDINGS

In an appropriate and rare bankruptcy case or proceeding, a special master can greatly contribute to the simplification and advancement of speedier and less costly litigation in numerous capacities.66 As noted earlier, the appointment of special masters (or other technical advisors) should be a last resort, or as one court articulated "hen's-teeth rare."67 This innovative case management tool (i.e., the authority to appoint a special master) possesses utility and can significantly contribute in an appropriate and rare bankruptcy case or proceeding as it does in complex and rare, non-bankruptcy civil matters.

When a bankruptcy or district court is faced with unusually difficult bankruptcy problems or unique issues of such complexity and sophistication beyond questions of law and fact, special masters may serve to actually expedite a case or proceeding more efficiently and competently.68 Special masters can, for example, contribute substantially in the areas of complex accounting and computation, discovery, and settlement.69

A. Special Masters In Matters of Account and Difficult Computation

The role of the special master can be most efficiently utilized in matters of account and difficult computation of damages as fully recognized by Federal Rule of Civil Procedure 53(b).70 Likewise, the use of special masters should be utilized in highly complex and extraordinary bankruptcy cases and proceedings for computing and analyzing claims.71 Interestingly, one commentator suggested that a special master, rather than the bankruptcy court, was the most effective method to estimate contingent and unliquidated claims.72 In suggesting the appointment of special masters by the bankruptcy court, the commentator plainly stated:

A bankruptcy court should consider appointing special masters, despite their expense, when it must estimate the values of a large number of claims in which the debtor has admitted liability. In these situations, special masters may obviate the need for any oral hearing, since valuation of damages often involves more concrete, objective factors than does evaluating liability. Moreover, special masters can save time and expense by traveling to the evidence. Finally, by estimating the value of claims outside the confines of the court, special masters can expedite bankruptcy proceedings for other debtors who need the attention of the bankruptcy judge.73