UNITED STATES DISTRICT COURT EASTERN
DISTRICT OF LOUISIANA
GENERAL ORDER REGARDING DEPOSIT AND INVESTMENT OF
REGISTRY FUNDS
To ensure uniformity in the deposit, investment, and tax administration of funds in the
Court's Registry, the court has determined it necessary to adopt local procedures. Therefore, IT
IS ORDERED that the following shall govern the receipt, deposit and investment of registry
funds:
I. Investment of Registry Funds
A. Where, by order of the court, funds on deposit with the Court are to be placed in
some form of interest-bearing account, or invested in a court-approved, interest-
bearing instrument in accordance with Rule 67 of the Federal Rules of Civil
Procedure, the Court Registry Investment System ("CRIS"), administered by the
Administrative Office of the United States Courts under 28 U.S.C. § 2045, shall
be the only investment mechanism authorized.
B. Interpleader funds deposited under 28 U.S.C. § 1335 meet the IRS definition of a
"Disputed Ownership Fund" (DOF), a taxable entity that requires tax
administration. Unless otherwise ordered by the court, interpleader funds shall be
deposited in the DOF established within the CRIS and administered by the
Administrative Office of the United States Courts, which shall be responsible for
meeting all DOF tax administration requirements.
C. The Director of the Administrative Office of the United States Courts is
designated as custodian for CRIS. The Director or the Director's designee shall
perform the duties of custodian. Funds held in the CRIS remain subject to the
control and jurisdiction of the Court.
D. Money from each case deposited in the CRIS shall be "pooled" together with
those on deposit with Treasury to the credit of other courts in the CRIS and used
to purchase Government Account Series securities through the Bureau of Public
Debt, which will be held at Treasury, in an account in the name and to the credit
of the Director of Administrative Office of the United States Courts. The pooled
funds will be invested in accordance with the principals of the CRIS Investment
Policy as approved by the Registry Monitoring Group.
E. An account for each case will be established in the CRIS Liquidity Fund titled in
the name of the case giving rise to the deposit invested in the fund. Income
generated from fund investments will be distributed to each case based on the
ratio each account's principal and earnings has to be aggregate principal and
income total in the fund after the CRIS fee has been applied. Reports showing the
interest earned and the principal amounts contributed in each case will be
prepared and distributed to each court participating in the CRIS and made
available to litigants and/or their counsel.
F. For each interpleader case, an account shall be established in the CRIS Disputed
Ownership Fund, titled in the name of the case giving rise to the deposit invested
in the fund. Income generated from the fund investments will be distributed to
each case after the DOF fee has been applied and tax withholdings have been
deducted from the fund. Reports showing the interest earned and the principal
amounts contributed in each case will be available through the FedInvest/CMS
application for each court participating in the CRIS and made available to litigants
and/or their counsel. On appointment of an administrator authorized to incur
expenses on behalf of the DOF in a case, the case DOF funds should be
transferred to another investment account as directed by court order.
III. Fees and Taxes
A. The custodian is authorized and directed by this Order to deduct the CRIS fee of
an annualized 10 basis points on assets on deposit for all CRIS funds, excluding
the case funds held in the DOF, for the management of investments in the CRIS.
According to the Court's Miscellaneous Fee Schedule, the CRIS fee is assessed
from the interest earnings to the pool before a pro rata distribution of earnings is
made to court cases.
B. The custodian is authorized and directed by this Order to deduct the DOF fee of
an annualized 20 basis points on assets on deposit in the DOF for management of
investments and tax administration. According to the Court's Miscellaneous Fee
Schedule, the DOF fee is assessed from interest earnings to the pool before a pro
rata distribution of earnings is made to court cases. The custodian is further
authorized and directed by this Order to withhold and pay federal taxes due on
behalf of the DOF.
IV. Transition From Former Investment Procedures
A. The Clerk of Court is further directed to develop a systematic method of
redemption of all existing investments and their transfer to the CRIS.
B. Deposits to the CRIS DOF will not be transferred from any existing CRIS Funds.
Only new deposits pursuant to 28 U.S.C. § 1335 from the effective date of this
order will be placed in the CRIS DOF.
C. Parties not wishing to transfer certain existing registry deposits into the CRIS may
seek to leave to transfer them to the litigants or their designees on proper motion
and approval of the judge assigned to the specific case.
D. This order supersedes and abrogates all prior orders of this Court regarding the
deposit and investment of registry funds.
E. The order is generally effective on the date of the entry, but DOF provisions will
become effective the date the CRIS DOF begins to accept deposits.
New Orleans, Louisiana, this 13th day of October 2016.
______________________________
KURT D. ENGELHARDT
CHIEF JUDGE
