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TITLE
11. BANKRUPTCY · UNITED STATES CODE
Chapter 3. Case Administration
Subchapter I. Commencement of a Case
§ 301. Voluntary
cases
§ 302. Joint cases
§ 303. Involuntary
cases
§ 304.
[Deleted]
§ 305. Abstention
§ 306. Limited
appearance
§ 307. United States
trustee
§ 308. Debtor
reporting requirements
Subchapter II. Officers
§ 321. Eligibility to
serve as trustee
§ 322. Qualification
of trustee
§ 323. Role and
capacity of trustee
§ 324. Removal of
trustee or examiner
§ 325. Effect of
vacancy
§ 326. Limitation on
compensation of trustee
§ 327. Employment of
professional persons
§ 328. Limitation on
compensation of professional persons
§ 329. Debtor's
transactions with attorneys
§ 330. Compensation
of officers
§ 331. Interim
compensation
§ 332. Consumer
privacy ombudsman
§ 333. Appointment of
patient care ombudsman
Subchapter III. Administration
§ 341. Meetings of
creditors and equity security holders
§ 342. Notice
§ 343. Examination of
the debtor
§ 344.
Self-incrimination; immunity
§ 345. Money of
estate
§ 346. Special
provisions related to the treatment of State and local taxes
§ 347. Unclaimed
property
§ 348. Effect of
conversion
§ 349. Effect of
dismissal
§ 350. Closing and
reopening cases
§ 351. Disposal
of patient records
Subchapter IV. Administrative Powers
§ 361. Adequate
protection
§ 362. Automatic stay
§ 363. Use, sale, or
lease of property
§ 364. Obtaining
credit
§ 365. Executory
contracts and unexpired leases
§ 366. Utility
service
Subchapter I. Commencement of a Case
11
USC § 301. Voluntary cases
(a) A voluntary case under a chapter of this title
is commenced by the filing with the bankruptcy court of a petition under such
chapter by an entity that may be a debtor under such chapter.
(b) The commencement of a voluntary case under a
chapter of this title constitutes an order for relief under such chapter.
[Rev. 4-29-05]
11
USC § 302. Joint cases
(a) A joint case under a chapter of this title is commenced by the filing
with the bankruptcy court of a single petition under such chapter by an
individual that may be a debtor under such chapter and such individual’s
spouse. The commencement of a joint case under a chapter of this title
constitutes an order for relief under such chapter.
(b) After the commencement of a joint case, the court shall determine the
extent, if any, to which the debtors’ estates shall be consolidated.
[Rev. 4-29-05]
11
USC § 303. Involuntary cases
(a) An involuntary case may be commenced only under chapter
7 or 11 of
this title, and only against a person, except a farmer, family farmer, or a
corporation that is not a moneyed, business, or commercial corporation, that
may be a debtor under the chapter under which such case is commenced.
(b) An involuntary case against a person is commenced
by the filing with the bankruptcy court of a petition under chapter
7 or 11 of
this title—
(1) by three or more entities, each of which is either a holder of a
claim against such person that is not contingent as to liability or the
subject of a bona fide dispute as to liability or amount,
or an indenture trustee representing such a holder,
if such noncontingent, undisputed claims aggregate at
least $10,000 [
Adjusted every 3 years by section
104.] more than the value of any lien on property of the debtor
securing such claims held by the holders of such claims;
(2) if there are fewer than 12 such holders, excluding any employee or
insider of such person and any transferee of a transfer that is voidable
under section
544, 545,
547, 548,
549,
or 724(a)
of this title, by one or more of such holders that hold in the aggregate at
least $10,000 [
Adjusted every 3 years by section
104.] of such claims;
(3) if such person is a partnership—
(A) by fewer than all of the general partners in such partnership; or
(B) if relief has been ordered under this title with respect to all of
the general partners in such partnership, by a general partner in such
partnership, the trustee of such a general partner, or a holder of a claim
against such partnership; or
(4) by a foreign representative of the estate in a foreign proceeding
concerning such person.
(c) After the filing of a petition under this section
but before the case is dismissed or relief is ordered, a creditor holding an
unsecured claim that is not contingent, other than a creditor filing under
subsection (b) of this section, may join in the petition with the same effect
as if such joining creditor were a petitioning creditor under subsection (b)
of this section.
(d) The debtor, or a general partner in a partnership
debtor that did not join in the petition, may file an answer to a petition
under this section.
(e) After notice and a hearing, and for cause, the
court may require the petitioners under this section to file a bond to
indemnify the debtor for such amounts as the court may later allow under
subsection (i) of this section.
(f) Notwithstanding section
363 of this title, except to the extent that the court orders otherwise,
and until an order for relief in the case, any business of the debtor may
continue to operate, and the debtor may continue to use, acquire, or dispose
of property as if an involuntary case concerning the debtor had not been
commenced.
(g) At any time after the commencement of an
involuntary case under chapter
7 of this title but before an order for relief in the case, the court, on
request of a party in interest, after notice to the debtor and a hearing, and
if necessary to preserve the property of the estate or to prevent loss to the
estate, may order the United States trustee to appoint an interim trustee
under section
701 of this title to take possession of the property of the estate and to
operate any business of the debtor. Before an order for relief, the debtor may
regain possession of property in the possession of a trustee ordered appointed
under this subsection if the debtor files such bond as the court requires,
conditioned on the debtor’s accounting for and delivering to the trustee, if
there is an order for relief in the case, such property, or the value, as of
the date the debtor regains possession, of such property.
(h) If the petition is not timely controverted, the
court shall order relief against the debtor in an involuntary case under the
chapter under which the petition was filed. Otherwise, after trial, the court
shall order relief against the debtor in an involuntary case under the chapter
under which the petition was filed, only if—
(1) the debtor is generally not paying such debtor’s debts as such
debts become due unless such debts are the subject of a bona fide dispute;
or
(1) the debtor is generally not paying such debtor's debts as such debts
become due unless such debts are the subject of a bona fide dispute as
to liability or amount; or
(2) within 120 days before the date of the filing of the petition, a
custodian, other than a trustee, receiver, or agent appointed or authorized
to take charge of less than substantially all of the property of the debtor
for the purpose of enforcing a lien against such property, was appointed or
took possession.
(i) If the court dismisses a petition under this
section other than on consent of all petitioners and the debtor, and if the
debtor does not waive the right to judgment under this subsection, the court
may grant judgment—
(1) against the petitioners and in favor of the debtor for—
(A) costs; or
(B) a reasonable attorney’s fee; or
(2) against any petitioner that filed the petition in bad faith, for—
(A) any damages proximately caused by such filing; or
(B) punitive damages.
(j) Only after notice to all creditors and a hearing
may the court dismiss a petition filed under this section—
(1) on the motion of a petitioner;
(2) on consent of all petitioners and the debtor; or
(3) for want of prosecution.
[Rev. 4-29-05]
11
USC § 304.
[Deleted]
[Rev. 4-29-05]
11
USC § 305. Abstention
(a) The court, after notice and a hearing, may dismiss a case under this
title, or may suspend all proceedings in a case under this title, at any time
if—
(1) the interests of creditors and the debtor would be better served by
such dismissal or suspension; or
(2)
(A) a
petition under section
1515 for recognition of a foreign proceeding has been granted; and
(B) the
purposes of chapter
15 of this title would be best served by such dismissal or suspension.
(b) A foreign representative may seek dismissal or suspension under
subsection (a)(2) of this section.
(c) An order under subsection (a) of this section dismissing a case or
suspending all proceedings in a case, or a decision not so to dismiss or
suspend, is not reviewable by appeal or otherwise by the court of appeals
under section
158(d), 1291,
or 1292
of title 28 or by the Supreme Court of the United States under section
1254 of title 28.
[Rev. 4-29-05]
11
USC § 306. Limited appearance
An appearance in a bankruptcy court by a foreign representative in connection
with a petition or request under section
303
or 305
of this title does not submit such foreign representative to the jurisdiction of
any court in the United States for any other purpose, but the bankruptcy court
may condition any order under section
303
or 305
of this title on compliance by such foreign representative with the orders of
such bankruptcy court.
[Rev. 4-29-05]
11
USC § 307. United States trustee
The United States trustee may raise and may appear and be heard on any issue
in any case or proceeding under this title but may not file a plan pursuant to section
1121(c) of this title.
[Rev. 4-29-05]
11
USC § 308. Debtor reporting requirements
(a) For purposes of this section, the term
"profitability" means, with respect to a debtor, the amount of money
that the debtor has earned or lost during current and recent fiscal periods.
(b) A small business debtor shall file periodic financial and other reports
containing information including--
(1) the debtor's profitability;
(2) reasonable approximations of the debtor's projected cash receipts and
cash disbursements over a reasonable period;
(3) comparisons of actual cash receipts and disbursements with
projections in prior reports;
(4)
(A) whether the debtor is--
(i) in compliance in all material respects with postpetition
requirements imposed by this title and the Federal
Rules of Bankruptcy Procedure; and
(ii) timely filing tax returns and other required government filings
and paying taxes and other administrative expenses when due;
(B) if the debtor is not in compliance with the requirements referred
to in subparagraph (A)(i) or filing tax returns and other required
government filings and making the payments referred to in subparagraph
(A)(ii), what the failures are and how, at what cost, and when the debtor
intends to remedy such failures; and
(C) such other matters as are in the best interests of the debtor and
creditors, and in the public interest in fair and efficient procedures
under chapter 11
of this title.
[Rev. 4-29-05]
Subchapter II. Officers
11
USC § 321. Eligibility to serve as trustee
(a) A person may serve as trustee in a case under this title only if such
person is—
(1) an individual that is competent to perform the duties of trustee and,
in a case under chapter 7, 12, or 13 of this title, resides or has an office
in the judicial district within which the case is pending, or in any
judicial district adjacent to such district; or
(2) a corporation authorized by such corporation’s charter or bylaws to
act as trustee, and, in a case under chapter 7, 12, or 13 of this title,
having an office in at least one of such districts.
(b) A person that has served as an examiner in the case may not serve as
trustee in the case.
(c) The United States trustee for the judicial district in which the case
is pending is eligible to serve as trustee in the case if necessary.
[Rev. 4-30-05]
11
USC § 322. Qualification of trustee
(a) Except as provided in subsection (b)(1), a person selected under section
701, 702,
703,
1104,
1163,
1202,
or 1302
of this title to serve as trustee in a case under this title qualifies if
before five days after such selection, and before beginning official duties,
such person has filed with the court a bond in favor of the United States
conditioned on the faithful performance of such official duties.
(b)
(1) The United States trustee qualifies wherever such trustee serves as
trustee in a case under this title.
(2) The United States trustee shall determine—
(A) the amount of a bond required to be filed under subsection (a) of
this section; and
(B) the sufficiency of the surety on such bond.
(c) A trustee is not liable personally or on such trustee’s bond in
favor of the United States for any penalty or forfeiture incurred by the
debtor.
(d) A proceeding on a trustee’s bond may not be commenced after two years
after the date on which such trustee was discharged.
[Rev. 4-30-05]
11
USC § 323. Role and capacity of trustee
(a) The trustee in a case under this title is the representative of the
estate.
(b) The trustee in a case under this title has capacity to sue and be sued.
[Rev. 4-30-05]
11
USC § 324. Removal of trustee or examiner
(a) The court, after notice and a hearing, may remove a trustee, other than
the United States trustee, or an examiner, for cause.
(b) Whenever the court removes a trustee or examiner under subsection (a)
in a case under this title, such trustee or examiner shall thereby be removed
in all other cases under this title in which such trustee or examiner is then
serving unless the court orders otherwise.
[Rev. 4-30-05]
11
USC § 325. Effect of vacancy
A vacancy in the office of trustee during a case does not abate any pending
action or proceeding, and the successor trustee shall be substituted as a party
in such action or proceeding.
[Rev. 4-30-05]
11
USC § 326. Limitation on compensation of trustee
(a) In a case under chapter
7 or 11, the
court may allow reasonable compensation under section
330 of this title of the trustee for the trustee’s services, payable
after the trustee renders such services, not to exceed 25 percent on the first
$5,000 or less, 10 percent on any amount in excess of $5,000 but not in excess
of $50,000, 5 percent on any amount in excess of $50,000 but not in excess of
$1,000,000, and reasonable compensation not to exceed 3 percent of such moneys
in excess of $1,000,000, upon all moneys disbursed or turned over in the case
by the trustee to parties in interest, excluding the debtor, but including
holders of secured claims.
(b) In a case under chapter
12 or 13
of this title, the court may not allow compensation for services or
reimbursement of expenses of the United States trustee or of a standing
trustee appointed under section
586(b) of title 28, but may allow reasonable compensation under section
330 of this title of a trustee appointed under section
1202(a) or 1302(a)
of this title for the trustee’s services, payable after the trustee renders
such services, not to exceed five percent upon all payments under the plan.
(c) If more than one person serves as trustee in the case, the aggregate
compensation of such persons for such service may not exceed the maximum
compensation prescribed for a single trustee by subsection (a) or (b) of this
section, as the case may be.
(d) The court may deny allowance of compensation for services or
reimbursement of expenses of the trustee if the trustee failed to make
diligent inquiry into facts that would permit denial of allowance under section
328(c) of this title or, with knowledge of such facts, employed a
professional person under section
327 of this title.
[Rev. 4-30-05]
11
USC § 327. Employment of professional persons
(a) Except as otherwise provided in this section, the trustee, with the
court’s approval, may employ one or more attorneys, accountants, appraisers,
auctioneers, or other professional persons, that do not hold or represent an
interest adverse to the estate, and that are disinterested persons, to
represent or assist the trustee in carrying out the trustee’s duties under
this title.
(b) If the trustee is authorized to operate the business of the debtor
under section
721, 1202,
or 1108
of this title, and if the debtor has regularly employed attorneys,
accountants, or other professional persons on salary, the trustee may retain
or replace such professional persons if necessary in the operation of such
business.
(c) In a case under chapter
7, 12,
or 11 of this
title, a person is not disqualified for employment under this section solely
because of such person’s employment by or representation of a creditor,
unless there is objection by another creditor or the United States trustee, in
which case the court shall disapprove such employment if there is an actual
conflict of interest.
(d) The court may authorize the trustee to act as attorney or accountant
for the estate if such authorization is in the best interest of the estate.
(e) The trustee, with the court’s approval, may employ, for a specified
special purpose, other than to represent the trustee in conducting the case,
an attorney that has represented the debtor, if in the best interest of the
estate, and if such attorney does not represent or hold any interest adverse
to the debtor or to the estate with respect to the matter on which such
attorney is to be employed.
(f) The trustee may not employ a person that has served as an examiner in
the case.
[Rev. 4-30-05]
11
USC § 328. Limitation on compensation of professional persons
(a) The trustee, or a committee appointed under section
1102 of this title, with the court’s approval, may employ or authorize
the employment of a professional person under section
327 or 1103
of this title, as the case may be, on any reasonable terms and conditions of
employment, including on a retainer, on an hourly basis, on a
fixed or percentage fee basis, or on a contingent fee basis.
Notwithstanding such terms and conditions, the court may allow compensation
different from the compensation provided under such terms and conditions after
the conclusion of such employment, if such terms and conditions prove to have
been improvident in light of developments not capable of being anticipated at
the time of the fixing of such terms and conditions.
(b) If the court has authorized a trustee to serve as an attorney or
accountant for the estate under section
327(d) of this title, the court may allow compensation for the trustee’s
services as such attorney or accountant only to the extent that the trustee
performed services as attorney or accountant for the estate and not for
performance of any of the trustee’s duties that are generally performed by a
trustee without the assistance of an attorney or accountant for the estate.
(c) Except as provided in section
327(c), 327(e),
or 1107(b)
of this title, the court may deny allowance of compensation for services and
reimbursement of expenses of a professional person employed under section
327 or 1103
of this title if, at any time during such professional person’s employment
under section
327 or 1103>
of this title, such professional person is not a disinterested person, or
represents or holds an interest adverse to the interest of the estate with
respect to the matter on which such professional person is employed.
[Rev. 4-30-05]
11
USC § 329. Debtor’s transactions with attorneys
(a) Any attorney representing a debtor in a case under this title, or in
connection with such a case, whether or not such attorney applies for
compensation under this title, shall file with the court a statement of the
compensation paid or agreed to be paid, if such payment or agreement was made
after one year before the date of the filing of the petition, for services
rendered or to be rendered in contemplation of or in connection with the case
by such attorney, and the source of such compensation.
(b) If such compensation exceeds the reasonable value of any such services,
the court may cancel any such agreement, or order the return of any such
payment, to the extent excessive, to—
(1) the estate, if the property transferred—
(A) would have been property of the estate; or
(B) was to be paid by or on behalf of the debtor under a plan under chapter
11, 12,
or 13
of this title; or
(2) the entity that made such payment.
[Rev. 4-30-05]
11
USC § 330. Compensation of officers
(a)
(1) After notice to the parties in interest and the United States Trustee
and a hearing, and subject to sections
326, 328,
and 329,
the court may award to a trustee, a consumer privacy
ombudsman appointed under section
332, an examiner, an ombudsman appointed under section
333, or a professional person employed under section
327 or 1103--
(A) reasonable compensation for actual, necessary services rendered by
the trustee, examiner, professional person, or attorney and by any
paraprofessional person employed by any such person; and
(B) reimbursement for actual, necessary expenses.
(2) The court may, on its own motion or on the motion of the United
States Trustee, the United States Trustee for the District or Region, the
trustee for the estate, or any other party in interest, award compensation
that is less than the amount of compensation that is requested.
(3) In
determining the amount of reasonable compensation to be awarded to
an examiner, trustee under chapter
11, or professional person, the court shall consider the nature,
the extent, and the value of such services, taking into account all relevant
factors, including--
(A) the time spent on such services;
(B) the rates charged for such services;
(C) whether the services were necessary to the administration of, or
beneficial at the time at which the service was rendered toward the
completion of, a case under this title;
(D) whether the services were performed within a reasonable amount of
time commensurate with the complexity, importance, and nature of the
problem, issue, or task addressed; and
(E) with respect to a professional person, whether the
person is board certified or otherwise has demonstrated skill and
experience in the bankruptcy field; and
(F) whether the compensation is reasonable based
on the customary compensation charged by comparably skilled practitioners
in cases other than cases under this title.
(4)
(A) Except as provided in subparagraph (B), the court shall not allow
compensation for—
(i) unnecessary duplication of services; or
(ii) services that were not—
(I) reasonably likely to benefit the debtor’s estate; or
(II) necessary to the administration of the case.
(B) In a chapter
12 or chapter
13 case in which the debtor is an individual, the court may allow
reasonable compensation to the debtor’s attorney for representing the
interests of the debtor in connection with the bankruptcy case based on a
consideration of the benefit and necessity of such services to the debtor
and the other factors set forth in this section.
(5) The court shall reduce the amount of compensation awarded under this
section by the amount of any interim compensation awarded under section
331, and, if the amount of such interim compensation exceeds the amount
of compensation awarded under this section, may order the return of the
excess to the estate.
(6) Any compensation awarded for the preparation of a fee application
shall be based on the level and skill reasonably required to prepare the
application.
(7) In determining the amount of reasonable compensation
to be awarded to a trustee, the court shall treat such compensation as a
commission, based on section
326.
(b)
(1) There shall be paid from the filing fee in a case under chapter
7 of this title $45 to the trustee serving in such case, after such
trustee’s services are rendered.
(2) The Judicial Conference of the United States—
(A) shall prescribe additional fees of the same kind as prescribed
under section
1914(b) of title 28; and
(B) may prescribe notice of appearance fees and fees charged against
distributions in cases under this title;
to pay $15 to trustees serving in cases after such trustees’ services
are rendered. Beginning 1 year after the date of the enactment of the
Bankruptcy Reform Act of 1994, such $15 shall be paid in addition to the
amount paid under paragraph (1).
(c) Unless the court orders otherwise, in a case under chapter
12 or 13
of this title the compensation paid to the trustee serving in the case shall
not be less than $5 per month from any distribution under the plan during the
administration of the plan.
(d) In a case in which the United States trustee serves as trustee, the
compensation of the trustee under this section shall be paid to the clerk of
the bankruptcy court and deposited by the clerk into the United States Trustee
System Fund established by section
589a of title 28.
[Rev. 4-30-05]
11
USC § 331. Interim compensation
A trustee, an examiner, a debtor’s attorney, or any professional person
employed under section
327 or 1103
of this title may apply to the court not more than once every 120 days after an
order for relief in a case under this title, or more often if the court permits,
for such compensation for services rendered before the date of such an
application or reimbursement for expenses incurred before such date as is
provided under section
330 of this title. After notice and a hearing, the court may allow and
disburse to such applicant such compensation or reimbursement.
[Rev. 4-30-05]
11
USC § 332. Consumer privacy ombudsman
(a) If a hearing is required under section
363(b)(1)(B), the court shall order the United States trustee to appoint,
not later than 5 days before the commencement of the hearing, 1 disinterested
person (other than the United States trustee) to serve as the consumer privacy
ombudsman in the case and shall require that notice of such hearing be timely
given to such ombudsman.
(b) The consumer privacy ombudsman may appear and be heard at such hearing
and shall provide to the court information to assist the court in its
consideration of the facts, circumstances, and conditions of the proposed sale
or lease of personally identifiable information under section
363(b)(1)(B). Such information may include presentation of--
(1) the debtor's privacy policy;
(2) the potential losses or gains of privacy to consumers if such sale or
such lease is approved by the court;
(3) the potential costs or benefits to consumers if such sale or such
lease is approved by the court; and
(4) the potential alternatives that would mitigate potential privacy
losses or potential costs to consumers.
(c) A consumer privacy ombudsman shall not disclose any personally
identifiable information obtained by the ombudsman under this title.
[Rev. 4-30-05]
11
USC § 333. Appointment of patient care ombudsman
(a)
(1) If the debtor in a case under chapter
7, 9,
or 11 is a
health care business, the court shall order, not later than 30 days after
the commencement of the case, the appointment of an ombudsman to monitor the
quality of patient care and to represent the interests of the patients of
the health care business unless the court finds that the appointment of such
ombudsman is not necessary for the protection of patients under the specific
facts of the case.
(2)
(A) If the court orders the appointment of an ombudsman under paragraph
(1), the United States trustee shall appoint 1 disinterested person (other
than the United States trustee) to serve as such ombudsman.
(B) If the debtor is a health care business that provides long-term
care, then the United States trustee may appoint the State Long-Term Care
Ombudsman appointed under the Older Americans Act of 1965 for the State in
which the case is pending to serve as the ombudsman required by paragraph
(1).
(C) If the United States trustee does not appoint a State Long-Term
Care Ombudsman under subparagraph (B), the court shall notify the State
Long-Term Care Ombudsman appointed under the Older Americans Act of 1965
for the State in which the case is pending, of the name and address of the
person who is appointed under subparagraph (A).
(b) An ombudsman appointed under subsection (a) shall--
(1) monitor the quality of patient care provided to patients of the
debtor, to the extent necessary under the circumstances, including
interviewing patients and physicians;
(2) not later than 60 days after the date of appointment, and not less
frequently than at 60-day intervals thereafter, report to the court after
notice to the parties in interest, at a hearing or in writing, regarding the
quality of patient care provided to patients of the debtor; and
(3) if such ombudsman determines that the quality of patient care
provided to patients of the debtor is declining significantly or is
otherwise being materially compromised, file with the court a motion or a
written report, with notice to the parties in interest immediately upon
making such determination.
(c)
(1) An ombudsman appointed under subsection (a) shall maintain any
information obtained by such ombudsman under this section that relates to
patients (including information relating to patient records) as confidential
information. Such ombudsman may not review confidential patient records
unless the court approves such review in advance and imposes restrictions on
such ombudsman to protect the confidentiality of such records.
(2) An ombudsman appointed under subsection (a)(2)(B) shall have access
to patient records consistent with authority of such ombudsman under the
Older Americans Act of 1965 and under non-Federal laws governing the State
Long-Term Care Ombudsman program.
[Rev. 4-30-05]
Subchapter III. Administration
11
USC § 341. Meetings of creditors and equity security holders
(a) Within a reasonable time after the order for
relief in a case under this title, the United States trustee shall convene and
preside at a meeting of creditors.
(b) The United States trustee may convene a meeting of
any equity security holders.
(c) The court may not preside at, and may not attend,
any meeting under this section including any final meeting of creditors. Notwithstanding
any local court rule, provision of a State constitution, any otherwise
applicable nonbankruptcy law, or any other requirement that representation at
the meeting of creditors under subsection (a) be by an attorney, a creditor
holding a consumer debt or any representative of the creditor (which may
include an entity or an employee of an entity and may be a representative for
more than 1 creditor) shall be permitted to appear at and participate in the
meeting of creditors in a case under chapter 7 or 13, either alone or in
conjunction with an attorney for the creditor. Nothing in this subsection
shall be construed to require any creditor to be represented by an attorney at
any meeting of creditors.
(d) Prior to the conclusion of the meeting of
creditors or equity security holders, the trustee shall orally examine the
debtor to ensure that the debtor in a case under chapter 7 of this title is
aware of—
(1) the potential consequences of seeking a discharge in bankruptcy,
including the effects on credit history;
(2) the debtor’s ability to file a petition under a different chapter
of this title;
(3) the effect of receiving a discharge of debts under this title; and
(4) the effect of reaffirming a debt, including the debtor’s knowledge
of the provisions of section
524(d) of this title.
(e) Notwithstanding subsections (a)
and (b), the court, on the request of a party in interest and after notice and
a hearing, for cause may order that the United States trustee not convene a
meeting of creditors or equity security holders if the debtor has filed a plan
as to which the debtor solicited acceptances prior to the commencement of the
case.
[Rev. 4-30-05]
11
USC § 342. Notice
[Sample notice
given by U. S. Bankruptcy Court, District of Arizona]
(a) There shall be given such notice as is appropriate, including notice to
any holder of a community claim, of an order for relief in a case under this
title.
(b) Before the commencement of a case under this title by
an individual whose debts are primarily consumer debts, the clerk shall give
to such individual written notice containing--
(1) a brief description of--
(A) chapters
7, 11, 12,
and 13
and the general purpose, benefits, and costs of proceeding under each of
those chapters; and
(B) the types of services available from credit
counseling agencies; and
(2) statements specifying that--
(A) a person who knowingly and fraudulently conceals
assets or makes a false oath or statement under penalty of perjury in
connection with a case under this title shall be subject to fine,
imprisonment, or both; and
(B) all information supplied by a debtor in connection
with a case under this title is subject to examination by the Attorney
General.
(c)
(1) If notice is required to be given by the
debtor to a creditor under this title, any rule, any applicable law, or any
order of the court, such notice shall contain the name, address, and last
4 digits of the taxpayer identification number of the debtor.
If the notice concerns an amendment that adds a creditor to
the schedules of assets and liabilities, the debtor shall include the full
taxpayer identification number in the notice sent to that creditor, but the
debtor shall include only the last 4 digits of the taxpayer identification
number in the copy of the notice filed with the court.
(2)
(A) If, within the 90 days before the commencement of a
voluntary case, a creditor supplies the debtor in at least 2
communications sent to the debtor with the current account number of the
debtor and the address at which such creditor requests to receive
correspondence, then any notice required by this title to be sent by the
debtor to such creditor shall be sent to such address and shall include
such account number.
(B) If a creditor would be in violation of applicable
nonbankruptcy law by sending any such communication within such 90-day
period and if such creditor supplies the debtor in the last 2
communications with the current account number of the debtor and the
address at which such creditor requests to receive correspondence, then
any notice required by this title to be sent by the debtor to such
creditor shall be sent to such address and shall include such account
number.
(d) In a case under chapter
7 of this title in which the debtor is an individual and in which the
presumption of abuse arises under section
707(b), the clerk shall give written notice to all creditors not later
than 10 days after the date of the filing of the petition that the presumption
of abuse has arisen.
(e)
(1) In a case under chapter
7 or 13
of this title of a debtor who is an individual, a creditor at any time may
both file with the court and serve on the debtor a notice of address to be
used to provide notice in such case to such creditor.
(2) Any notice in such case required to be provided to
such creditor by the debtor or the court later than 5 days after the court
and the debtor receive such creditor's notice of address, shall be provided
to such address.
(f)
(1) An entity may file with any bankruptcy court a notice
of address to be used by all the bankruptcy courts or by particular
bankruptcy courts, as so specified by such entity at the time such notice is
filed, to provide notice to such entity in all cases under chapters
7 and 13
pending in the courts with respect to which such notice is filed, in which
such entity is a creditor.
(2) In any case filed under chapter
7 or 13,
any notice required to be provided by a court with respect to which a notice
is filed under paragraph (1), to such entity later than 30 days after the
filing of such notice under paragraph (1) shall be provided to such address
unless with respect to a particular case a different address is specified in
a notice filed and served in accordance with subsection (e).
(3) A notice filed under paragraph (1) may be withdrawn
by such entity.
(g)
(1) Notice provided to a creditor by the debtor or the
court other than in accordance with this section (excluding this subsection)
shall not be effective notice until such notice is brought to the attention
of such creditor. If such creditor designates a person or an organizational
subdivision of such creditor to be responsible for receiving notices under
this title and establishes reasonable procedures so that such notices
receivable by such creditor are to be delivered to such person or such
subdivision, then a notice provided to such creditor other than in
accordance with this section (excluding this subsection) shall not be
considered to have been brought to the attention of such creditor until such
notice is received by such person or such subdivision.
(2) A monetary penalty may not be imposed on a creditor
for a violation of a stay in effect under section
362(a) (including a monetary penalty imposed under section
362(k)) or for failure to comply with section
542 or 543
unless the conduct that is the basis of such violation or of such failure
occurs after such creditor receives notice effective under this section of
the order for relief.
[Rev. 4-30-05]
11
USC § 343. Examination of the debtor
The debtor shall appear and submit to examination under oath at the meeting
of creditors under section
341(a) of this title. Creditors, any indenture trustee, any trustee or
examiner in the case, or the United States trustee may examine the debtor. The
United States trustee may administer the oath required under this section.
[Rev. 4-30-05]
11
USC § 344. Self-incrimination; immunity
Immunity for persons required to submit to examination, to testify, or to
provide information in a case under this title may be granted under part V of
title 18.
[Rev. 4-30-05]
11
USC § 345. Money of estates
(a) A trustee in a case under this title may make such deposit or
investment of the money of the estate for which such trustee serves as will
yield the maximum reasonable net return on such money, taking into account the
safety of such deposit or investment.
(b) Except with respect to a deposit or investment that is insured or
guaranteed by the United States or by a department, agency, or instrumentality
of the United States or backed by the full faith and credit of the United
States, the trustee shall require from an entity with which such money is
deposited or invested—
(1) a bond—
(A) in favor of the United States;
(B) secured by the undertaking of a corporate surety approved by the
United States trustee for the district in which the case is pending; and
(C) conditioned on—
(i) a proper accounting for all money so deposited or invested and
for any return on such money;
(ii) prompt repayment of such money and return; and
(iii) faithful performance of duties as a depository; or
(2) the deposit of securities of the kind specified in section
9303 of title 31;
unless the court for cause orders otherwise.
(c) An entity with which such moneys are deposited or invested is
authorized to deposit or invest such moneys as may be required under this
section.
[Rev. 4-30-05]
11
USC § 346. Special
provisions related to the treatment of State and local taxes
(a) Whenever the Internal Revenue Code of 1986 provides
that a separate taxable estate or entity is created in a case concerning a
debtor under this title, and the income, gain, loss, deductions, and credits
of such estate shall be taxed to or claimed by the estate, a separate taxable
estate is also created for purposes of any State and local law imposing a tax
on or measured by income and such income, gain, loss, deductions, and credits
shall be taxed to or claimed by the estate and may not be taxed to or claimed
by the debtor. The preceding sentence shall not apply if the case is
dismissed. The trustee shall make tax returns of income required under any
such State or local law.
(b) Whenever the Internal Revenue Code of 1986 provides that no separate
taxable estate shall be created in a case concerning a debtor under this
title, and the income, gain, loss, deductions, and credits of an estate shall
be taxed to or claimed by the debtor, such income, gain, loss, deductions, and
credits shall be taxed to or claimed by the debtor under a State or local law
imposing a tax on or measured by income and may not be taxed to or claimed by
the estate. The trustee shall make such tax returns of income of corporations
and of partnerships as are required under any State or local law, but with
respect to partnerships, shall make such returns only to the extent such
returns are also required to be made under such Code. The estate shall be
liable for any tax imposed on such corporation or partnership, but not for any
tax imposed on partners or members.
(c) With respect to a partnership or any entity treated as a partnership
under a State or local law imposing a tax on or measured by income that is a
debtor in a case under this title, any gain or loss resulting from a
distribution of property from such partnership, or any distributive share of
any income, gain, loss, deduction, or credit of a partner or member that is
distributed, or considered distributed, from such partnership, after the
commencement of the case, is gain, loss, income, deduction, or credit, as the
case may be, of the partner or member, and if such partner or member is a
debtor in a case under this title, shall be subject to tax in accordance with
subsection (a) or (b).
(d) For purposes of any State or local law imposing a tax on or measured by
income, the taxable period of a debtor in a case under this title shall
terminate only if and to the extent that the taxable period of such debtor
terminates under the Internal Revenue Code of 1986.
(e) The estate in any case described in subsection (a) shall use the same
accounting method as the debtor used immediately before the commencement of
the case, if such method of accounting complies with applicable nonbankruptcy
tax law.
(f) For purposes of any State or local law imposing a tax on or measured by
income, a transfer of property from the debtor to the estate or from the
estate to the debtor shall not be treated as a disposition for purposes of any
provision assigning tax consequences to a disposition, except to the extent
that such transfer is treated as a disposition under the Internal Revenue Code
of 1986.
(g) Whenever a tax is imposed pursuant to a State or local law imposing a
tax on or measured by income pursuant to subsection (a) or (b), such tax shall
be imposed at rates generally applicable to the same types of entities under
such State or local law.
(h) The trustee shall withhold from any payment of claims for wages,
salaries, commissions, dividends, interest, or other payments, or collect, any
amount required to be withheld or collected under applicable State or local
tax law, and shall pay such withheld or collected amount to the appropriate
governmental unit at the time and in the manner required by such tax law, and
with the same priority as the claim from which such amount was withheld or
collected was paid.
(i)
(1) To the extent that any State or local law imposing a tax on or
measured by income provides for the carryover of any tax attribute from one
taxable period to a subsequent taxable period, the estate shall succeed to
such tax attribute in any case in which such estate is subject to tax under
subsection (a).
(2) After such a case is closed or dismissed, the debtor shall succeed to
any tax attribute to which the estate succeeded under paragraph (1) to the
extent consistent with the Internal Revenue Code of 1986.
(3) The estate may carry back any loss or tax attribute to a taxable
period of the debtor that ended before the date of the order for relief
under this title to the extent that--
(A) applicable State or local tax law provides for a carryback in the
case of the debtor; and
(B) the same or a similar tax attribute may be carried back by the
estate to such a taxable period of the debtor under the Internal Revenue
Code of 1986.
(j)
(1) For purposes of any State or local law imposing a tax on or measured
by income, income is not realized by the estate, the debtor, or a successor
to the debtor by reason of discharge of indebtedness in a case under this
title, except to the extent, if any, that such income is subject to tax
under the Internal Revenue Code of 1986.
(2) Whenever the Internal Revenue Code of 1986 provides that the amount
excluded from gross income in respect of the discharge of indebtedness in a
case under this title shall be applied to reduce the tax attributes of the
debtor or the estate, a similar reduction shall be made under any State or
local law imposing a tax on or measured by income to the extent such State
or local law recognizes such attributes. Such State or local law may also
provide for the reduction of other attributes to the extent that the full
amount of income from the discharge of indebtedness has not been applied.
(k)
(1) Except as provided in this section and section
505, the time and manner of filing tax returns and the items of income,
gain, loss, deduction, and credit of any taxpayer shall be determined under
applicable nonbankruptcy law.
(2) For Federal tax purposes, the provisions of this section are subject
to the Internal Revenue Code of 1986 and other applicable Federal
nonbankruptcy law.
[Rev. 4-30-05]
11
USC § 347. Unclaimed property
(a) Ninety days after the final distribution under section
726, 1226,
or 1326
of this title in a case under chapter
7, 12,
or 13
of this title, as the case may be, the trustee shall stop payment on any check
remaining unpaid, and any remaining property of the estate shall be paid into
the court and disposed of under chapter
129 of title 28.
(b) Any security, money, or other property remaining unclaimed at the
expiration of the time allowed in a case under chapter
9, 11, or 12
of this title for the presentation of a security or the performance of any
other act as a condition to participation in the distribution under any plan
confirmed under section
943(b), 1129,
1173,
or 1225
of this title, as the case may be, becomes the property of the debtor or of
the entity acquiring the assets of the debtor under the plan, as the case may
be.
[Rev. 4-30-05]
11
USC § 348. Effect of conversion
(a) Conversion of a case from a case under one chapter of this title to a
case under another chapter of this title constitutes an order for relief under
the chapter to which the case is converted, but, except as provided in
subsections (b) and (c) of this section, does not effect a change in the date
of the filing of the petition, the commencement of the case, or the order for
relief.
(b) Unless the court for cause orders otherwise, in sections
701(a), 727(a)(10),
727(b),
728(a),
728(b),
1102(a),
1110(a)(1),
1121(b),
1121(c),
1141(d)(4),
1146(a),
1146(b),
1201(a),
1221,
1228(a),
1301(a),
and 1305(a)
of this title, "the order for relief under this chapter" in a
chapter to which a case has been converted under section
706, 1112,
1208,
or 1307
of this title means the conversion of such case to such chapter.
(c) Sections
342 and 365(d)
of this title apply in a case that has been converted under section
706, 1112,
1208,
or 1307
of this title, as if the conversion order were the order for relief.
(d) A claim against the estate or the debtor that arises after the order
for relief but before conversion in a case that is converted under section
1112, 1208,
or 1307
of this title, other than a claim specified in section
503(b) of this title, shall be treated for all purposes as if such claim
had arisen immediately before the date of the filing of the petition.
(e) Conversion of a case under section
706, 1112,
1208,
or 1307
of this title terminates the service of any trustee or examiner that is
serving in the case before such conversion.
(f)
(1) Except as provided in paragraph (2), when a case under chapter
13 of this title is converted to a case under another chapter under this
title--
(A) property of the estate in the converted case shall consist of
property of the estate, as of the date of filing of the petition, that
remains in the possession of or is under the control of the debtor on the
date of conversion;
(B) valuations of property and of allowed secured claims in the chapter
13 case shall apply only
in a case converted to a case under chapter
11 or 12,
but not in a case converted to a case under chapter
7, with allowed secured claims in cases under chapters
11 and 12
reduced to the extent that they have been paid in accordance with the chapter
13 plan;
and
(C) with respect to cases converted from chapter
13--
(i) the claim of any creditor holding security as of
the date of the petition shall continue to be secured by that security
unless the full amount of such claim determined under applicable
nonbankruptcy law has been paid in full as of the date of conversion,
notwithstanding any valuation or determination of the amount of an
allowed secured claim made for the purposes of the case under chapter
13; and
(ii) unless a prebankruptcy default has been fully
cured under the plan at the time of conversion, in any proceeding under
this title or otherwise, the default shall have the effect given under
applicable nonbankruptcy law.
(2) If the debtor converts a case under chapter
13 of this title to a case under another chapter under this title in bad
faith, the property of the estate in the converted
case shall consist of the property of the estate as of the date of
conversion.
[Rev. 4-30-05]
11
USC § 349. Effect of dismissal
(a) Unless the court, for cause, orders otherwise, the dismissal of a case
under this title does not bar the discharge, in a later case under this title,
of debts that were dischargeable in the case dismissed; nor does the dismissal
of a case under this title prejudice the debtor with regard to the filing of a
subsequent petition under this title, except as provided in section
109(g) of this title.
(b) Unless the court, for cause, orders otherwise, a dismissal of a case
other than under section 742 of this title—
(1) reinstates—
(A) any proceeding or custodianship superseded under section
543 of this title;
(B) any transfer avoided under section
522, 544,
545,
547,
548,
549,
or 724(a)
of this title, or preserved under section
510(c)(2), 522(i)(2),
or 551
of this title; and
(C) any lien voided under section
506(d) of this title;
(2) vacates any order, judgment, or transfer ordered, under section
522(i)(1), 542,
550,
or 553 of
this title; and
(3) revests the property of the estate in the entity in which such
property was vested immediately before the commencement of the case under
this title.
[Rev. 4-30-05]
11
USC § 350. Closing and reopening cases
(a) After an estate is fully administered and the court has discharged the
trustee, the court shall close the case.
(b) A case may be reopened in the court in which such case was closed to
administer assets, to accord relief to the debtor, or for other cause.
[Rev. 4-30-05]
11
USC § 351. Disposal of patient records
If a health care business commences a case under chapter
7, 9,
or 11, and the
trustee does not have a sufficient amount of funds to pay for the storage of
patient records in the manner required under applicable Federal or State law,
the following requirements shall apply:
(1) The trustee shall--
(A) promptly publish notice, in 1 or more appropriate newspapers, that if
patient records are not claimed by the patient or an insurance provider (if
applicable law permits the insurance provider to make that claim) by the
date that is 365 days after the date of that notification, the trustee will
destroy the patient records; and
(B) during the first 180 days of the 365-day period described in
subparagraph (A), promptly attempt to notify directly each patient that is
the subject of the patient records and appropriate insurance carrier
concerning the patient records by mailing to the most recent known address
of that patient, or a family member or contact person for that patient, and
to the appropriate insurance carrier an appropriate notice regarding the
claiming or disposing of patient records.
(2) If, after providing the notification under paragraph (1), patient
records are not claimed during the 365-day period described under that
paragraph, the trustee shall mail, by certified mail, at the end of such
365-day period a written request to each appropriate Federal agency to request
permission from that agency to deposit the patient records with that agency,
except that no Federal agency is required to accept patient records under this
paragraph.
(3) If, following the 365-day period described in paragraph (2) and after
providing the notification under paragraph (1), patient records are not
claimed by a patient or insurance provider, or request is not granted by a
Federal agency to deposit such records with that agency, the trustee shall
destroy those records by--
(A) if the records are written, shredding or burning the records; or
(B) if the records are magnetic, optical, or other electronic records, by
otherwise destroying those records so that those records cannot be
retrieved.
[Rev. 4-30-05]
Subchapter IV. Administrative Powers
11
USC § 361. Adequate protection
When adequate protection is required under section
362, 363,
or 364
of this title of an interest of an entity in property, such adequate protection
may be provided by--
(1) requiring the trustee to make a cash payment or periodic cash payments
to such entity, to the extent that the stay under section 362 of this title,
use, sale, or lease under section
363 of this title, or any grant of a lien under section
364 of this title results in a decrease in the value of such entity’s
interest in such property;
(2) providing to such entity an additional or replacement lien to the
extent that such stay, use, sale, lease, or grant results in a decrease in the
value of such entity’s interest in such property; or
(3) granting such other relief, other than entitling such entity to
compensation allowable under section
503(b)(1) of this title as an administrative expense, as will result in
the realization by such entity of the indubitable equivalent of such entity’s
interest in such property.
[Rev. 5-2-05]
11
USC § 362. Automatic stay
(a) Except as provided in subsection (b) of this
section, a petition filed under section
301, 302,
or 303
of this title, or an application filed under section 5(a)(3) of the Securities
Investor Protection Act of 1970, operates as a stay, applicable to all
entities, of--
(1) the commencement or continuation, including
the issuance or employment of process, of a judicial, administrative, or
other action or proceeding against the debtor that was or could have been
commenced before the commencement of the case under this title, or to
recover a claim against the debtor that arose before the commencement of the
case under this title;
(2) the enforcement, against the debtor or
against property of the estate, of a judgment obtained before the
commencement of the case under this title;
(3) any act to obtain possession of property of
the estate or of property from the estate or to exercise control over
property of the estate;
(4) any act to create, perfect, or enforce any
lien against property of the estate;
(5) any act to create, perfect, or enforce
against property of the debtor any lien to the extent that such lien secures
a claim that arose before the commencement of the case under this title;
(6) any act to collect, assess, or recover a
claim against the debtor that arose before the commencement of the case
under this title;
(7) the setoff of any debt owing to the debtor
that arose before the commencement of the case under this title against any
claim against the debtor; and
(8) the commencement or continuation of a
proceeding before the United States Tax Court concerning a
corporate debtor's tax liability for a taxable period the bankruptcy court
may determine or concerning the tax liability of a debtor who is an
individual for a taxable period ending before the date of the order for
relief under this title.
(b) The filing of a petition under section
301, 302,
or 303
of this title, or of an application under section 5(a)(3) of the Securities
Investor Protection Act of 1970, does not operate as a stay--
(1) under subsection
(a) of this section, of the commencement or continuation of a criminal
action or proceeding against the debtor;
(2) under subsection
(a)--
(A) of the commencement or continuation of a civil
action or proceeding--
(i) for the establishment of paternity;
(ii) for the establishment or modification of an
order for domestic support obligations;
(iii) concerning child custody or visitation;
(iv) for the dissolution of a marriage, except to the
extent that such proceeding seeks to determine the division of property
that is property of the estate; or
(v) regarding domestic violence;
(B) of the collection of a domestic support obligation
from property that is not property of the estate;
(C) with respect to the withholding of income that is
property of the estate or property of the debtor for payment of a domestic
support obligation under a judicial or administrative order or a statute;
(D) of the withholding, suspension, or restriction of a
driver's license, a professional or occupational license, or a
recreational license, under State law, as specified in section 466(a)(16)
of the Social Security Act;
(E) of the reporting of overdue support owed by a
parent to any consumer reporting agency as specified in section 466(a)(7)
of the Social Security Act;
(F) of the interception of a tax refund, as specified
in sections 464 and 466(a)(3) of the Social Security Act or under an
analogous State law; or
(G) of the enforcement of a medical obligation, as
specified under title IV of the Social Security Act;
(3) under subsection
(a) of this section, of any act to perfect, or to maintain or continue
the perfection of, an interest in property to the extent that the
trustee’s rights and powers are subject to such perfection under section
546(b) of this title or to the extent that such act is accomplished
within the period provided under section
547(e)(2)(A) of this title;
(4) under paragraph
(1), (2),
(3),
or (6)
of subsection
(a) of this section, of the commencement or continuation of an action or
proceeding by a governmental unit or any organization exercising authority
under the Convention on the Prohibition of the Development, Production,
Stockpiling and Use of Chemical Weapons and on Their Destruction, opened for
signature on January 13, 1993, to enforce such governmental unit’s or
organization’s police and regulatory power, including the enforcement of a
judgment other than a money judgment, obtained in an action or proceeding by
the governmental unit to enforce such governmental unit’s or
organization’s police or regulatory power;
[(5) Repealed. Pub. L. 105–277, div. I, title
VI, § 603(1), Oct. 21, 1998, 112 Stat. 2681–866;]
(6) under subsection
(a) of this section, of the setoff by a commodity broker, forward
contract merchant, stockbroker, financial
institution, financial participant, or securities clearing agency of
any mutual debt and claim under or in connection with commodity contracts,
as defined in section
761 of this title, forward contracts, or securities contracts, as
defined in section
741 of this title, that constitutes the setoff of a claim against the
debtor for a margin payment, as defined in section
101, 741,
or 761
of this title, or settlement payment, as defined in section
101 or 741
of this title, arising out of commodity contracts, forward contracts, or
securities contracts against cash, securities, or other property held by,
pledged to, under the control of, or due from such commodity broker,
forward contract merchant, stockbroker, financial
institution, financial participant, or securities clearing agency to
margin, guarantee, secure, or settle commodity contracts, forward contracts,
or securities contracts;
(7) under subsection
(a) of this section, of the setoff by a repo participant or
financial participant, of any mutual debt and claim under or in
connection with repurchase agreements that constitutes the setoff of a claim
against the debtor for a margin payment, as defined in section
741, or 761
of this title, or settlement payment, as defined in section 741 of this
title, arising out of repurchase agreements against cash, securities, or
other property held by, pledged to, under the control of,
or due from such repo participant or financial participant
to margin, guarantee, secure or settle repurchase agreements;
(8) under subsection
(a) of this section, of the commencement of any action by the Secretary
of Housing and Urban Development to foreclose a mortgage or deed of trust in
any case in which the mortgage or deed of trust held by the Secretary is
insured or was formerly insured under the National Housing Act and covers
property, or combinations of property, consisting of five or more living
units;
(9) under subsection
(a), of--
(A) an audit by a governmental unit to determine tax liability;
(B) the issuance to the debtor by a governmental unit of a notice of
tax deficiency;
(C) a demand for tax returns; or
(D) the making of an assessment for any tax and issuance of a notice
and demand for payment of such an assessment (but any tax lien that would
otherwise attach to property of the estate by reason of such an assessment
shall not take effect unless such tax is a debt of the debtor that will
not be discharged in the case and such property or its proceeds are
transferred out of the estate to, or otherwise revested in, the debtor).
(10) under subsection
(a) of this section, of any act by a lessor to the debtor under a lease
of nonresidential real property that has terminated by the expiration of the
stated term of the lease before the commencement of or during a case under
this title to obtain possession of such property;
(11) under subsection
(a) of this section, of the presentment of a negotiable instrument and
the giving of notice of and protesting dishonor of such an instrument;
(12) under subsection
(a) of this section, after the date which is 90 days after the filing of
such petition, of the commencement or continuation, and conclusion to the
entry of final judgment, of an action which involves a debtor subject to
reorganization pursuant to chapter 11 of this title and which was brought by
the Secretary of Transportation under section 31325 of title 46 (including
distribution of any proceeds of sale) to foreclose a preferred ship or fleet
mortgage, or a security interest in or relating to a vessel or vessel under
construction, held by the Secretary of Transportation under section 207 or
title XI of the Merchant Marine Act, 1936, or under applicable State law;
(13) under subsection
(a) of this section, after the date which is 90 days after the filing of
such petition, of the commencement or continuation, and conclusion to the
entry of final judgment, of an action which involves a debtor subject to
reorganization pursuant to chapter 11 of this title and which was brought by
the Secretary of Commerce under section 31325 of title 46 (including
distribution of any proceeds of sale) to foreclose a preferred ship or fleet
mortgage in a vessel or a mortgage, deed of trust, or other security
interest in a fishing facility held by the Secretary of Commerce under
section 207 or title XI of the Merchant Marine Act, 1936;
(14) under subsection
(a) of this section, of any action by an accrediting agency regarding
the accreditation status of the debtor as an educational institution;
(15) under subsection
(a) of this section, of any action by a State licensing body regarding
the licensure of the debtor as an educational institution;
(16) under subsection
(a) of this section, of any action by a guaranty agency, as defined in
section 435(j) of the Higher Education Act of 1965 or the Secretary of
Education regarding the eligibility of the debtor to participate in programs
authorized under such Act;
(17) under subsection
(a), of the setoff by a swap participant or financial participant of a
mutual debt and claim under or in connection with one or more swap
agreements that constitutes the setoff of a claim against the debtor for any
payment or other transfer of property due from the debtor under or in
connection with any swap agreement against any payment due to the debtor
from the swap participant or financial participant under or in connection
with any swap agreement or against cash, securities, or other property held
by, pledged to, under the control of, or due from such swap participant or
financial participant to margin, guarantee, secure, or settle any swap
agreement;
(18) under subsection
(a) of the creation or perfection of a statutory lien for an ad valorem
property tax, or a special tax or special assessment on real property
whether or not ad valorem, imposed by a governmental unit, if such tax or
assessment comes due after the date of the filing of the petition;
(19) under subsection
(a), of withholding of income from a debtor's wages and collection of
amounts withheld, under the debtor's agreement authorizing that withholding
and collection for the benefit of a pension, profit-sharing, stock bonus, or
other plan established under section
401, 403,
408,
408A, 414,
457, or 501(c)
of the Internal Revenue
Code of 1986, that is sponsored by the employer of the debtor, or an
affiliate, successor, or predecessor of such employer--
(A) to the extent that the amounts withheld and
collected are used solely for payments relating to a loan from a plan
under section 408(b)(1) of the Employee Retirement Income Security Act of
1974 or is subject to section
72(p) of the Internal Revenue Code of 1986; or
(B) a loan from a thrift savings plan permitted under
subchapter III of chapter 84 of title 5, that satisfies the requirements
of section 8433(g) of such title;
but nothing in this paragraph may be construed to provide
that any loan made under a governmental plan under section
414(d), or a contract or account under section
403(b), of the Internal Revenue Code of 1986 constitutes a claim or a
debt under this title;
(20) under subsection
(a), of any act to enforce any lien against or security interest
in real property following entry of the order under subsection (d)(4) as to
such real property in any prior case under this title, for a period of 2
years after the date of the entry of such an order, except that the debtor,
in a subsequent case under this title, may move for relief from such order
based upon changed circumstances or for other good cause shown, after notice
and a hearing;
(21) under subsection
(a), of any act to enforce any lien against or security interest in real
property--
(A) if the debtor is ineligible under section
109(g) to be a debtor in a case under this title; or
(B) if the case under this title was filed in violation
of a bankruptcy court order in a prior case under this title prohibiting
the debtor from being a debtor in another case under this title;
(22) subject to subsection
(l), under subsection
(a)(3), of the continuation of any eviction, unlawful detainer action,
or similar proceeding by a lessor against a debtor involving residential
property in which the debtor resides as a tenant under a lease or rental
agreement and with respect to which the lessor has obtained before the date
of the filing of the bankruptcy petition, a judgment for possession of such
property against the debtor;
(23) subject to subsection
(m), under subsection
(a)(3), of an eviction action that seeks possession of the residential
property in which the debtor resides as a tenant under a lease or rental
agreement based on endangerment of such property or the illegal use of
controlled substances on such property, but only if the lessor files with
the court, and serves upon the debtor, a certification under penalty of
perjury that such an eviction action has been filed, or that the debtor,
during the 30-day period preceding the date of the filing of the
certification, has endangered property or illegally used or allowed to be
used a controlled substance on the property;
(24) under subsection
(a), of any transfer that is not avoidable under section
544 and that is not avoidable under section
549;
(25) under subsection
(a), of--
(A) the commencement or continuation of an
investigation or action by a securities self regulatory organization to
enforce such organization's regulatory power;
(B) the enforcement of an order or decision, other than
for monetary sanctions, obtained in an action by such securities self
regulatory organization to enforce such organization's regulatory power;
or
(C) any act taken by such securities self regulatory
organization to delist, delete, or refuse to permit quotation of any stock
that does not meet applicable regulatory requirements;
(26) under subsection
(a), of the setoff under applicable nonbankruptcy law of an income tax
refund, by a governmental unit, with respect to a taxable period that ended
before the date of the order for relief against an income tax liability for
a taxable period that also ended before the date of the order for relief,
except that in any case in which the setoff of an income tax refund is not
permitted under applicable nonbankruptcy law because of a pending action to
determine the amount or legality of a tax liability, the governmental unit
may hold the refund pending the resolution of the action, unless the court,
on the motion of the trustee and after notice and a hearing, grants the
taxing authority adequate protection (within the meaning of section
361) for the secured claim of such authority in the setoff under section
506(a);
(27) under subsection
(a), of the setoff by a master netting agreement participant of a mutual
debt and claim under or in connection with one or more master netting
agreements or any contract or agreement subject to such agreements that
constitutes the setoff of a claim against the debtor for any payment or
other transfer of property due from the debtor under or in connection with
such agreements or any contract or agreement subject to such agreements
against any payment due to the debtor from such master netting agreement
participant under or in connection with such agreements or any contract or
agreement subject to such agreements or against cash, securities, or other
property held by, pledged to, under the control of, or due from such master
netting agreement participant to margin, guarantee, secure, or settle such
agreements or any contract or agreement subject to such agreements, to the
extent that such participant is eligible to exercise such offset rights
under paragraph
(6), (7),
or (17)
for each individual contract covered by the master netting agreement in
issue; and
(28) under subsection
(a), of the exclusion by the Secretary of Health and Human Services of
the debtor from participation in the medicare program or any other Federal
health care program (as defined in section 1128B(f) of the Social Security
Act pursuant to title XI or XVIII of such Act).
The provisions of paragraphs
(12) and (13)
of this subsection shall apply with respect to any such petition filed on or
before December 31, 1989.
(c) Except as provided in subsections
(d), (e),
(f),
and (h)
of this section--
(1) the stay of an act against property of the
estate under subsection
(a) of this section continues until such property is no longer property
of the estate;
(2) the stay of any other act under subsection
(a) of this section continues until the earliest of--
(A) the time the case is closed;
(B) the time the case is dismissed; or
(C) if the case is a case under chapter
7 of this title concerning an individual or a case under chapter
9, 11, 12,
or 13
of this title, the time a discharge is granted or denied;
(3) if a single or joint case is
filed by or against debtor who is an individual in a case under chapter
7, 11, or 13,
and if a single or joint case of the debtor was pending within the preceding
1-year period but was dismissed, other than a case refiled under a chapter
other than chapter 7
after dismissal under section
707(b)--
(A) the stay under subsection
(a) with respect to any action taken with respect to a debt or
property securing such debt or with respect to any lease shall terminate
with respect to the debtor on the 30th day after the filing of the later
case;
(B) on the motion of a party in interest for
continuation of the automatic stay and upon notice and a hearing, the
court may extend the stay in particular cases as to any or all creditors
(subject to such conditions or limitations as the court may then impose)
after notice and a hearing completed before the expiration of the 30-day
period only if the party in interest demonstrates that the filing of the
later case is in good faith as to the creditors to be stayed; and
(C) for purposes of subparagraph (B), a case is
presumptively filed not in good faith (but such presumption may be
rebutted by clear and convincing evidence to the contrary)--
(i) as to all creditors, if--
(I) more than 1 previous case under any of chapters
7, 11,
and 13
in which the individual was a debtor was pending within the preceding
1-year period;
(II) a previous case under any of chapters
7, 11,
and 13
in which the individual was a debtor was dismissed within such 1-year
period, after the debtor failed to--
(aa) file or amend the petition or other
documents as required by this title or the court without substantial
excuse (but mere inadvertence or negligence shall not be a
substantial excuse unless the dismissal was caused by the negligence
of the debtor's attorney);
(bb) provide adequate protection as ordered by
the court; or
(cc) perform the terms of a plan confirmed by the
court; or
(III) there has not been a substantial change in
the financial or personal affairs of the debtor since the dismissal of
the next most previous case under chapter
7, 11,
or 13
or any other reason to conclude that the later case will be
concluded--
(aa) if a case under chapter
7, with a discharge; or
(bb) if a case under chapter
11 or 13,
with a confirmed plan that will be fully performed; and
(ii) as to any creditor that commenced an action
under subsection
(d) in a previous case in which the individual was a debtor if, as
of the date of dismissal of such case, that action was still pending or
had been resolved by terminating, conditioning, or limiting the stay as
to actions of such creditor; and
(4)
(A)
(i) if a single or joint case is filed by or against
a debtor who is an individual under this title, and if 2 or more single
or joint cases of the debtor were pending within the previous year but
were dismissed, other than a case refiled under section
707(b), the stay under subsection
(a) shall not go into effect upon the filing of the later case; and
(ii) on request of a party in interest, the court
shall promptly enter an order confirming that no stay is in effect;
(B) if, within 30 days after the filing of the later
case, a party in interest requests the court may order the stay to take
effect in the case as to any or all creditors (subject to such conditions
or limitations as the court may impose), after notice and a hearing, only
if the party in interest demonstrates that the filing of the later case is
in good faith as to the creditors to be stayed;
(C) a stay imposed under subparagraph (B) shall be
effective on the date of the entry of the order allowing the stay to go
into effect; and
(D) for purposes of subparagraph (B), a case is
presumptively filed not in good faith (but such presumption may be
rebutted by clear and convincing evidence to the contrary)--
(i) as to all creditors if--
(I) 2 or more previous cases under this title in
which the individual was a debtor were pending within the 1-year
period;
(II) a previous case under this title in which the
individual was a debtor was dismissed within the time period stated in
this paragraph after the debtor failed to file or amend the petition
or other documents as required by this title or the court without
substantial excuse (but mere inadvertence or negligence shall not be
substantial excuse unless the dismissal was caused by the negligence
of the debtor's attorney), failed to provide adequate protection as
ordered by the court, or failed to perform the terms of a plan
confirmed by the court; or
(III) there has not been a substantial change in
the financial or personal affairs of the debtor since the dismissal of
the next most previous case under this title, or any other reason to
conclude that the later case will not be concluded, if a case under chapter
7, with a discharge, and if a case under chapter
11 or 13,
with a confirmed plan that will be fully performed; or
(ii) as to any creditor that commenced an action
under subsection
(d) in a previous case in which the individual was a debtor if, as
of the date of dismissal of such case, such action was still pending or
had been resolved by terminating, conditioning, or limiting the stay as
to such action of such creditor.
(d) On request of a party in interest and after notice
and a hearing, the court shall grant relief from the stay provided under subsection
(a) of this section, such as by terminating, annulling, modifying, or
conditioning such stay--
(1) for cause, including the lack of adequate protection of an interest
in property of such party in interest;
(2) with respect to a stay of an act against property under subsection
(a) of this section, if--
(A) the debtor does not have an equity in such property; and
(B) such property is not necessary to an effective reorganization;
(3) with respect to a stay of an act against single asset real estate
under subsection
(a), by a creditor whose claim is secured by an interest in such real
estate, unless, not later than the date that is 90 days after the entry of
the order for relief (or such later date as the court may determine for
cause by order entered within that 90-day period) or 30 days
after the court determines that the debtor is subject to this paragraph,
whichever is later--
(A) the debtor has filed a plan of reorganization that has a reasonable
possibility of being confirmed within a reasonable time; or
(B) the debtor has commenced monthly payments that--
(i) may, in the debtor's sole discretion,
notwithstanding section
363(c)(2), be made from rents or other income generated before, on,
or after the date of the commencement of the case by or from the
property to each creditor whose claim is secured by such real estate
(other than a claim secured by a judgment lien or by an unmatured
statutory lien); and
(ii) are in an amount equal to interest at the then
applicable nondefault contract rate of interest on the value of the
creditor's interest in the real estate; or
(4) with respect to a stay of an act against real
property under subsection
(a), by a creditor whose claim is secured by an interest in such real
property, if the court finds that the filing of the petition was part of a
scheme to delay, hinder, and defraud creditors that involved either--
(A) transfer of all or part ownership of, or other
interest in, such real property without the consent of the secured
creditor or court approval; or
(B) multiple bankruptcy filings affecting such real
property.
If recorded in compliance with applicable State laws
governing notices of interests or liens in real property, an order entered
under paragraph (4) shall be binding in any other case under this title
purporting to affect such real property filed not later than 2 years after the
date of the entry of such order by the court, except that a debtor in a
subsequent case under this title may move for relief from such order based
upon changed circumstances or for good cause shown, after notice and a
hearing. Any Federal, State, or local governmental unit that accepts notices
of interests or liens in real property shall accept any certified copy of an
order described in this subsection for indexing and recording.
(e)
(1) Thirty days after a request under subsection
(d) of this section for relief from the stay of any act against property
of the estate under subsection
(a) of this section, such stay is terminated with respect to the party
in interest making such request, unless the court, after notice and a
hearing, orders such stay continued in effect pending the conclusion of, or
as a result of, a final hearing and determination under subsection
(d) of this section. A hearing under this subsection may be a
preliminary hearing, or may be consolidated with the final hearing under subsection
(d) of this section. The court shall order such stay continued in effect
pending the conclusion of the final hearing under subsection
(d) of this section if there is a reasonable likelihood that the party
opposing relief from such stay will prevail at the conclusion of such final
hearing. If the hearing under this subsection is a preliminary hearing, then
such final hearing shall be concluded not later than thirty days after the
conclusion of such preliminary hearing, unless the 30-day period is extended
with the consent of the parties in interest or for a specific time which the
court finds is required by compelling circumstances.
(2) Notwithstanding paragraph (1), in a case under chapter
7, 11, or 13
in which the debtor is an individual, the stay under subsection
(a) shall terminate on the date that is 60 days after a request is made
by a party in interest under subsection
(d), unless--
(A) a final decision is rendered by the court during
the 60-day period beginning on the date of the request; or
(B) such 60-day period is extended--
(i) by agreement of all parties in interest; or
(ii) by the court for such specific period of time as
the court finds is required for good cause, as described in findings
made by the court.
(f) Upon request of a party in interest, the court,
with or without a hearing, shall grant such relief from the stay provided
under subsection
(a) of this section as is necessary to prevent irreparable damage to the
interest of an entity in property, if such interest will suffer such damage
before there is an opportunity for notice and a hearing under subsection
(d) or (e) of this section.
(g) In any hearing under subsection
(d) or (e)
of this section concerning relief from the stay of any act under subsection
(a) of this section--
(1) the party requesting such relief has the burden of proof on the issue
of the debtor’s equity in property; and
(2) the party opposing such relief has the burden of proof on all other
issues.
(h)
(1) In a case in which the debtor is an individual, the
stay provided by subsection
(a) is terminated with respect to personal property of the estate or of
the debtor securing in whole or in part a claim, or subject to an unexpired
lease, and such personal property shall no longer be property of the estate
if the debtor fails within the applicable time set by section
521(a)(2)--
(A) to file timely any statement of intention required
under section
521(a)(2) with respect to such personal property or to indicate in
such statement that the debtor will either surrender such personal
property or retain it and, if retaining such personal property, either
redeem such personal property pursuant to section
722, enter into an agreement of the kind specified in section
524(c) applicable to the debt secured by such personal property, or
assume such unexpired lease pursuant to section
365(p) if the trustee does not do so, as applicable; and
(B) to take timely the action specified in such
statement, as it may be amended before expiration of the period for taking
action, unless such statement specifies the debtor's intention to reaffirm
such debt on the original contract terms and the creditor refuses to agree
to the reaffirmation on such terms.
(2) Paragraph (1) does not apply if the court determines,
on the motion of the trustee filed before the expiration of the applicable
time set by section
521(a)(2), after notice and a hearing, that such personal property is of
consequential value or benefit to the estate, and orders appropriate
adequate protection of the creditor's interest, and orders the debtor to
deliver any collateral in the debtor's possession to the trustee. If the
court does not so determine, the stay provided by subsection
(a) shall terminate upon the conclusion of the hearing on the motion.
(i) If a case commenced under chapter
7, 11, or 13
is dismissed due to the creation of a debt repayment plan, for purposes of subsection
(c)(3), any subsequent case commenced by the debtor under any such chapter
shall not be presumed to be filed not in good faith.
(j) On request of a party in interest,
the court shall issue an order under subsection
(c) confirming that the automatic stay has been terminated.
(k)
(1) Except as provided in paragraph (2), an
individual injured by any willful violation of a stay provided by this
section shall recover actual damages, including costs and attorneys’ fees,
and, in appropriate circumstances, may recover punitive damages.
(2) If such violation is based on an action taken by an
entity in the good faith belief that subsection (h) applies to the debtor,
the recovery under paragraph (1) of this subsection against such entity
shall be limited to actual damages.
(l)
(1) Except as otherwise provided in this subsection, subsection
(b)(22) shall apply on the date that is 30 days after the date on which
the bankruptcy petition is filed, if the debtor files with the petition and
serves upon the lessor a certification under penalty of perjury that--
(A) under nonbankruptcy law applicable in the
jurisdiction, there are circumstances under which the debtor would be
permitted to cure the entire monetary default that gave rise to the
judgment for possession, after that judgment for possession was entered;
and
(B) the debtor (or an adult dependent of the debtor)
has deposited with the clerk of the court, any rent that would become due
during the 30-day period after the filing of the bankruptcy petition.
(2) If, within the 30-day period after the filing of the
bankruptcy petition, the debtor (or an adult dependent of the debtor)
complies with paragraph (1) and files with the court and serves upon the
lessor a further certification under penalty of perjury that the debtor (or
an adult dependent of the debtor) has cured, under nonbankrupcty law
applicable in the jurisdiction, the entire monetary default that gave rise
to the judgment under which possession is sought by the lessor, subsection
(b)(22) shall not apply, unless ordered to apply by the court under
paragraph (3).
(3)
(A) If the lessor files an objection to any
certification filed by the debtor under paragraph (1) or (2), and serves
such objection upon the debtor, the court shall hold a hearing within 10
days after the filing and service of such objection to determine if the
certification filed by the debtor under paragraph (1) or (2) is true.
(B) If the court upholds the objection of the lessor
filed under subparagraph (A)--
(i) subsection
(b)(22) shall apply immediately and relief from the stay provided
under subsection
(a)(3) shall not be required to enable the lessor to complete the
process to recover full possession of the property; and
(ii) the clerk of the court shall immediately serve
upon the lessor and the debtor a certified copy of the court's order
upholding the lessor's objection.
(4) If a debtor, in accordance with paragraph (5),
indicates on the petition that there was a judgment for possession of the
residential rental property in which the debtor resides and does not file a
certification under paragraph (1) or (2)--
(A) subsection
(b)(22) shall apply immediately upon failure to file such
certification, and relief from the stay provided under subsection
(a)(3) shall not be required to enable the lessor to complete the
process to recover full possession of the property; and
(B) the clerk of the court shall immediately serve upon
the lessor and the debtor a certified copy of the docket indicating the
absence of a filed certification and the applicability of the exception to
the stay under subsection
(b)(22).
(5)
(A) Where a judgment for possession of residential
property in which the debtor resides as a tenant under a lease or rental
agreement has been obtained by the lessor, the debtor shall so indicate on
the bankruptcy petition and shall provide the name and address of the
lessor that obtained that pre-petition judgment on the petition and on any
certification filed under this subsection.
(B) The form of certification filed with the petition,
as specified in this subsection, shall provide for the debtor to certify,
and the debtor shall certify--
(i) whether a judgment for possession of residential
rental housing in which the debtor resides has been obtained against the
debtor before the date of the filing of the petition; and
(ii) whether the debtor is claiming under paragraph
(1) that under nonbankruptcy law applicable in the jurisdiction, there
are circumstances under which the debtor would be permitted to cure the
entire monetary default that gave rise to the judgment for possession,
after that judgment of possession was entered, and has made the
appropriate deposit with the court.
(C) The standard forms (electronic and otherwise) used
in a bankruptcy proceeding shall be amended to reflect the requirements of
this subsection.
(D) The clerk of the court shall arrange for the prompt
transmittal of the rent deposited in accordance with paragraph (1)(B) to
the lessor.
(m)
(1) Except as otherwise provided in this subsection, subsection
(b)(23) shall apply on the date that is 15 days after the date on which
the lessor files and serves a certification described in subsection
(b)(23).
(2)
(A) If the debtor files with the court an objection to
the truth or legal sufficiency of the certification described in subsection
(b)(23) and serves such objection upon the lessor, subsection
(b)(23) shall not apply, unless ordered to apply by the court under
this subsection.
(B) If the debtor files and serves the objection under
subparagraph (A), the court shall hold a hearing within 10 days after the
filing and service of such objection to determine if the situation giving
rise to the lessor's certification under paragraph (1) existed or has been
remedied.
(C) If the debtor can demonstrate to the satisfaction
of the court that the situation giving rise to the lessor's certification
under paragraph (1) did not exist or has been remedied, the stay provided
under subsection
(a)(3) shall remain in effect until the termination of the stay under
this section.
(D) If the debtor cannot demonstrate to the
satisfaction of the court that the situation giving rise to the lessor's
certification under paragraph (1) did not exist or has been remedied--
(i) relief from the stay provided under subsection
(a)(3) shall not be required to enable the lessor to proceed with
the eviction; and
(ii) the clerk of the court shall immediately serve
upon the lessor and the debtor a certified copy of the court's order
upholding the lessor's certification.
(3) If the debtor fails to file, within 15 days, an
objection under paragraph (2)(A)--
(A) subsection (b)(23)
shall apply immediately upon such failure and relief from the stay
provided under subsection
(a)(3) shall not be required to enable the lessor to complete the
process to recover full possession of the property; and
(B) the clerk of the court shall immediately serve upon
the lessor and the debtor a certified copy of the docket indicating such
failure.
(n)
(1) Except as provided in paragraph (2), subsection
(a) does not apply in a case in which the debtor--
(A) is a debtor in a small business case pending at the
time the petition is filed;
(B) was a debtor in a small business case that was
dismissed for any reason by an order that became final in the 2-year
period ending on the date of the order for relief entered with respect to
the petition;
(C) was a debtor in a small business case in which a
plan was confirmed in the 2-year period ending on the date of the order
for relief entered with respect to the petition; or
(D) is an entity that has acquired substantially all of
the assets or business of a small business debtor described in
subparagraph (A), (B), or (C), unless such entity establishes by a
preponderance of the evidence that such entity acquired substantially all
of the assets or business of such small business debtor in good faith and
not for the purpose of evading this paragraph.
(2) Paragraph (1) does not apply--
(A) to an involuntary case involving no collusion by
the debtor with creditors; or
(B) to the filing of a petition if--
(i) the debtor proves by a preponderance of the
evidence that the filing of the petition resulted from circumstances
beyond the control of the debtor not foreseeable at the time the case
then pending was filed; and
(ii) it is more likely than not that the court will
confirm a feasible plan, but not a liquidating plan, within a reasonable
period of time.
(o) The exercise of rights not subject
to the stay arising under subsection
(a) pursuant to paragraph
(6), (7), (17),
or (27)
of subsection (b) shall not be stayed by any order of a court or
administrative agency in any proceeding under this title.
Rev. 5-2-05]
11
USC § 363. Use, sale, or lease of property
(a) In this section, "cash collateral" means
cash, negotiable instruments, documents of title, securities, deposit
accounts, or other cash equivalents whenever acquired in which the estate and
an entity other than the estate have an interest and includes the proceeds,
products, offspring, rents, or profits of property and the fees, charges,
accounts or other payments for the use or occupancy of rooms and other public
facilities in hotels, motels, or other lodging properties subject to a
security interest as provided in section
552(b) of this title, whether existing before or after the commencement of
a case under this title.
(b)
(1) The trustee, after notice and a hearing, may use, sell, or lease,
other than in the ordinary course of business, property of the estate.,
except that if the debtor in connection with offering a product or a service
discloses to an individual a policy prohibiting the transfer of personally
identifiable information about individuals to persons that are not
affiliated with the debtor and if such policy is in effect on the date of
the commencement of the case, then the trustee may not sell or lease
personally identifiable information to any person unless--
(A) such sale or such lease is consistent with such
policy; or
(B) after appointment of a consumer privacy ombudsman
in accordance with section
332, and after notice and a hearing, the court approves such sale or
such lease--
(i) giving due consideration to the facts,
circumstances, and conditions of such sale or such lease; and
(ii) finding that no showing was made that such sale
or such lease would violate applicable nonbankruptcy law.
(2) If notification is required under subsection (a) of section 7A of the
Clayton Act in the case of a transaction under this subsection, then--
(A) notwithstanding subsection (a) of such section, the notification
required by such subsection to be given by the debtor shall be given by
the trustee; and
(B) notwithstanding subsection (b) of such section, the required
waiting period shall end on the 15th day after the date of the receipt, by
the Federal Trade Commission and the Assistant Attorney General in charge
of the Antitrust Division of the Department of Justice, of the
notification required under such subsection (a), unless such waiting
period is extended--
(i) pursuant to subsection (e)(2) of such section, in the same manner
as such subsection (e)(2) applies to a cash tender offer;
(ii) pursuant to subsection (g)(2) of such section; or
(iii) by the court after notice and a hearing.
(c)
(1) If the business of the debtor is authorized to be operated under section
721, 1108,
1203,
1204,
or 1304
of this title and unless the court orders otherwise, the trustee may enter
into transactions, including the sale or lease of property of the estate, in
the ordinary course of business, without notice or a hearing, and may use
property of the estate in the ordinary course of business without notice or
a hearing.
(2) The trustee may not use, sell, or lease cash collateral under
paragraph (1) of this subsection unless--
(A) each entity that has an interest in such cash collateral consents;
or
(B) the court, after notice and a hearing, authorizes such use, sale,
or lease in accordance with the provisions of this section.
(3) Any hearing under paragraph (2)(B) of this subsection may be a
preliminary hearing or may be consolidated with a hearing under subsection
(e) of this section, but shall be scheduled in accordance with the needs
of the debtor. If the hearing under paragraph (2)(B) of this subsection is a
preliminary hearing, the court may authorize such use, sale, or lease only
if there is a reasonable likelihood that the trustee will prevail at the
final hearing under subsection
(e) of this section. The court shall act promptly on any request for
authorization under paragraph (2)(B) of this subsection.
(4) Except as provided in paragraph (2) of this subsection, the trustee
shall segregate and account for any cash collateral in the trustee’s
possession, custody, or control.
(d) The trustee may use, sell, or lease property under
subsection
(b) or (c)
of this section only--
(1) in accordance with applicable nonbankruptcy law that
governs the transfer of property by a corporation or trust that is not a
moneyed, business, or commercial corporation or trust; and
(2) to the extent not inconsistent with any relief
granted under subsection
(c), (d),
(e),
or (f)
of section
362.
(e) Notwithstanding any other provision of this
section, at any time, on request of an entity that has an interest in property
used, sold, or leased, or proposed to be used, sold, or leased, by the
trustee, the court, with or without a hearing, shall prohibit or condition
such use, sale, or lease as is necessary to provide adequate protection of
such interest. This subsection also applies to property that is subject to any
unexpired lease of personal property (to the exclusion of such property being
subject to an order to grant relief from the stay under section
362).
(f) The trustee may sell property under subsection
(b) or (c)
of this section free and clear of any interest in such property of an entity
other than the estate, only if--
(1) applicable nonbankruptcy law permits sale of such property free and
clear of such interest;
(2) such entity consents;
(3) such interest is a lien and the price at which such property is to be
sold is greater than the aggregate value of all liens on such property;
(4) such interest is in bona fide dispute; or
(5) such entity could be compelled, in a legal or equitable proceeding,
to accept a money satisfaction of such interest.
(g) Notwithstanding subsection
(f) of this section, the trustee may sell property under subsection
(b) or (c)
of this section free and clear of any vested or contingent right in the nature
of dower or curtesy.
(h) Notwithstanding subsection
(f) of this section, the trustee may sell both the estate’s interest,
under subsection
(b) or (c)
of this section, and the interest of any co-owner in property in which the
debtor had, at the time of the commencement of the case, an undivided interest
as a tenant in common, joint tenant, or tenant by the entirety, only if--
(1) partition in kind of such property among the estate and such
co-owners is impracticable;
(2) sale of the estate’s undivided interest in such property would
realize significantly less for the estate than sale of such property free of
the interests of such co-owners;
(3) the benefit to the estate of a sale of such property free of the
interests of co-owners outweighs the detriment, if any, to such co-owners;
and
(4) such property is not used in the production, transmission, or
distribution, for sale, of electric energy or of natural or synthetic gas
for heat, light, or power.
(i) Before the consummation of a sale of property to
which subsection (g) or (h) of this section applies, or of property of the
estate that was community property of the debtor and the debtor’s spouse
immediately before the commencement of the case, the debtor’s spouse, or a
co-owner of such property, as the case may be, may purchase such property at
the price at which such sale is to be consummated.
(j) After a sale of property to which subsection
(g) or (h)
of this section applies, the trustee shall distribute to the debtor’s spouse
or the co-owners of such property, as the case may be, and to the estate, the
proceeds of such sale, less the costs and expenses, not including any
compensation of the trustee, of such sale, according to the interests of such
spouse or co-owners, and of the estate.
(k) At a sale under subsection
(b) of this section of property that is subject to a lien that secures an
allowed claim, unless the court for cause orders otherwise the holder of such
claim may bid at such sale, and, if the holder of such claim purchases such
property, such holder may offset such claim against the purchase price of such
property.
(l) Subject to the provisions of section 365, trustee
may use, sell, or lease property under subsection
(b) or (c)
of this section, or a plan under chapter
11, 12,
or 13
of this title may provide for the use, sale, or lease of property,
notwithstanding any provision in a contract, a lease, or applicable law that
is conditioned on the insolvency or financial condition of the debtor, on the
commencement of a case under this title concerning the debtor, or on the
appointment of or the taking possession by a trustee in a case under this
title or a custodian, and that effects, or gives an option to effect, a
forfeiture, modification, or termination of the debtor’s interest in such
property.
(m) The reversal or modification on appeal of an
authorization under subsection
(b) or (c)
of this section of a sale or lease of property does not affect the validity of
a sale or lease under such authorization to an entity that purchased or leased
such property in good faith, whether or not such entity knew of the pendency
of the appeal, unless such authorization and such sale or lease were stayed
pending appeal.
(n) The trustee may avoid a sale under this section if
the sale price was controlled by an agreement among potential bidders at such
sale, or may recover from a party to such agreement any amount by which the
value of the property sold exceeds the price at which such sale was
consummated, and may recover any costs, attorneys’ fees, or expenses
incurred in avoiding such sale or recovering such amount. In addition to any
recovery under the preceding sentence, the court may grant judgment for
punitive damages in favor of the estate and against any such party that
entered into such an agreement in willful disregard of this subsection.
(o) Notwithstanding subsection
(f), if a person purchases any interest in a consumer credit transaction
that is subject to the Truth in Lending Act or any interest in a consumer
credit contract (as defined in section 433.1 of title 16 of the Code of
Federal Regulations (January 1, 2004), as amended from time to time), and if
such interest is purchased through a sale under this section, then such person
shall remain subject to all claims and defenses that are related to such
consumer credit transaction or such consumer credit contract, to the same
extent as such person would be subject to such claims and defenses of the
consumer had such interest been purchased at a sale not under this section.
(p)
In any hearing under this section--
(1) the trustee has the burden of proof on the issue of adequate
protection; and
(2) the entity asserting an interest in property has the burden of proof
on the issue of the validity, priority, or extent of such interest.
[Rev. 5-4-05]
11
USC § 364. Obtaining credit
(a) If the trustee is authorized to operate the business of the debtor
under section
721, 1108,
1203,
1204,
or 1304
of this title, unless the court orders otherwise, the trustee may obtain
unsecured credit and incur unsecured debt in the ordinary course of business
allowable under section
503(b)(1) of this title as an administrative expense.
(b) The court, after notice and a hearing, may authorize the trustee to
obtain unsecured credit or to incur unsecured debt other than under subsection
(a) of this section, allowable under section
503(b)(1) of this title as an administrative expense.
(c) If the trustee is unable to obtain unsecured credit allowable under section
503(b)(1) of this title as an administrative expense, the court, after
notice and a hearing, may authorize the obtaining of credit or the incurring
of debt--
(1) with priority over any or all administrative expenses of the kind
specified in section
503(b) or 507(b)
of this title;
(2) secured by a lien on property of the estate that is not otherwise
subject to a lien; or
(3) secured by a junior lien on property of the estate that is subject to
a lien.
(d)
(1) The court, after notice and a hearing, may authorize the obtaining of
credit or the incurring of debt secured by a senior or equal lien on
property of the estate that is subject to a lien only if--
(A) the trustee is unable to obtain such credit otherwise; and
(B) there is adequate protection of the interest of the holder of the
lien on the property of the estate on which such senior or equal lien is
proposed to be granted.
(2) In any hearing under this subsection, the trustee has the burden of
proof on the issue of adequate protection.
(e) The reversal or modification on appeal of an authorization under this
section to obtain credit or incur debt, or of a grant under this section of a
priority or a lien, does not affect the validity of any debt so incurred, or
any priority or lien so granted, to an entity that extended such credit in
good faith, whether or not such entity knew of the pendency of the appeal,
unless such authorization and the incurring of such debt, or the granting of
such priority or lien, were stayed pending appeal.
(f) Except with respect to an entity that is an underwriter as defined in
section 1145 (b) of this title, section 5 of the Securities Act of 1933, the
Trust Indenture Act of 1939, and any State or local law requiring registration
for offer or sale of a security or registration or licensing of an issuer of,
underwriter of, or broker or dealer in, a security does not apply to the offer
or sale under this section of a security that is not an equity security.
[Rev. 5-4-05]
11
USC § 365. Executory contracts and unexpired leases
(a) Except as provided in sections
765 and 766
of this title and in subsections
(b), (c),
and (d)
of this section, the trustee, subject to the court’s approval, may assume or
reject any executory contract or unexpired lease of the debtor.
(b)
(1) If there has been a default in an executory
contract or unexpired lease of the debtor, the trustee may not assume such
contract or lease unless, at the time of assumption of such contract or
lease, the trustee--
(A) cures, or provides adequate assurance that the trustee will
promptly cure, such default
other than a default that is a breach of a provision
relating to the satisfaction of any provision (other than a penalty rate
or penalty provision) relating to a default arising from any failure to
perform nonmonetary obligations under an unexpired lease of real property,
if it is impossible for the trustee to cure such default by performing
nonmonetary acts at and after the time of assumption, except that if such
default arises from a failure to operate in accordance with a
nonresidential real property lease, then such default shall be cured by
performance at and after the time of assumption in accordance with such
lease, and pecuniary losses resulting from such default shall be
compensated in accordance with the provisions of this paragraph;
(B) compensates, or provides adequate assurance that the trustee will
promptly compensate, a party other than the debtor to such contract or
lease, for any actual pecuniary loss to such party resulting from such
default; and
(C) provides adequate assurance of future performance under such
contract or lease.
(2) Paragraph (1) of this subsection does not
apply to a default that is a breach of a provision relating to--
(A) the insolvency or financial condition of the debtor at any time
before the closing of the case;
(B) the commencement of a case under this title;
(C) the appointment of or taking possession by a trustee in a case
under this title or a custodian before such commencement; or
(D) the satisfaction of any penalty
rate or penalty provision relating to a default arising from any
failure by the debtor to perform nonmonetary obligations under the
executory contract or unexpired lease.
(3) For the purposes of paragraph (1) of this
subsection and paragraph (2)(B) of subsection
(f), adequate assurance of future performance of a lease of real
property in a shopping center includes adequate assurance--
(A) of the source of rent and other consideration due under such lease,
and in the case of an assignment, that the financial condition and
operating performance of the proposed assignee and its guarantors, if any,
shall be similar to the financial condition and operating performance of
the debtor and its guarantors, if any, as of the time the debtor became
the lessee under the lease;
(B) that any percentage rent due under such lease will not decline
substantially;
(C) that assumption or assignment of such lease is subject to all the
provisions thereof, including (but not limited to) provisions such as a
radius, location, use, or exclusivity provision, and will not breach any
such provision contained in any other lease, financing agreement, or
master agreement relating to such shopping center; and
(D) that assumption or assignment of such lease will not disrupt any
tenant mix or balance in such shopping center.
(4) Notwithstanding any other provision of this
section, if there has been a default in an unexpired lease of the debtor,
other than a default of a kind specified in paragraph (2) of this
subsection, the trustee may not require a lessor to provide services or
supplies incidental to such lease before assumption of such lease unless the
lessor is compensated under the terms of such lease for any services and
supplies provided under such lease before assumption of such lease.
(c) The trustee may not assume or assign any executory
contract or unexpired lease of the debtor, whether or not such contract or
lease prohibits or restricts assignment of rights or delegation of duties,
if--
(1)
(A) applicable law excuses a party, other than the debtor, to such
contract or lease from accepting performance from or rendering performance
to an entity other than the debtor or the debtor in possession, whether or
not such contract or lease prohibits or restricts assignment of rights or
delegation of duties; and
(B) such party does not consent to such assumption or assignment; or
(2) such contract is a contract to make a loan, or extend other debt
financing or financial accommodations, to or for the benefit of the debtor,
or to issue a security of the debtor; or
(3) such lease is of nonresidential real property and has been terminated
under applicable nonbankruptcy law prior to the order for relief.
(d)
(1) In a case under chapter
7 of this title, if the trustee does not assume or reject an executory
contract or unexpired lease of residential real property or of personal
property of the debtor within 60 days after the order for relief, or within
such additional time as the court, for cause, within such 60-day period,
fixes, then such contract or lease is deemed rejected.
(2) In a case under chapter
9, 11, 12,
or 13
of this title, the trustee may assume or reject an executory contract or
unexpired lease of residential real property or of personal property of the
debtor at any time before the confirmation of a plan but the court, on the
request of any party to such contract or lease, may order the trustee to
determine within a specified period of time whether to assume or reject such
contract or lease.
(3) The trustee shall timely perform all the
obligations of the debtor, except those specified in section
365(b)(2), arising from and after the order for relief under any
unexpired lease of nonresidential real property, until such lease is assumed
or rejected, notwithstanding section
503(b)(1) of this title. The court may extend, for cause, the time for
performance of any such obligation that arises within 60 days after the date
of the order for relief, but the time for performance shall not be extended
beyond such 60-day period. This subsection shall not be deemed to affect the
trustee’s obligations under the provisions of subsection
(b) or (f)
of this section. Acceptance of any such performance does not constitute
waiver or relinquishment of the lessor’s rights under such lease or under
this title.
(4)
(A) Subject to subparagraph (B), an unexpired lease of
nonresidential real property under which the debtor is the lessee shall be
deemed rejected, and the trustee shall immediately surrender that
nonresidential real property to the lessor, if the trustee does not assume
or reject the unexpired lease by the earlier of--
(i) the date that is 120 days after the date of the
order for relief; or
(ii) the date of the entry of an order confirming a
plan.
(B)
(i) The court may extend the period determined under
subparagraph (A), prior to the expiration of the 120-day period, for 90
days on the motion of the trustee or lessor for cause.
(ii) If the court grants an extension under clause
(i), the court may grant a subsequent extension only upon prior written
consent of the lessor in each instance.
(5)
The trustee shall timely perform all of the obligations of the debtor,
except those specified in section
365(b)(2), first arising from or after 60 days after the order for
relief in a case under chapter
11 of this title under an unexpired lease of personal property (other
than personal property leased to an individual primarily for personal,
family, or household purposes), until such lease is assumed or rejected
notwithstanding section
503(b)(1) of this title, unless the court, after notice and a hearing
and based on the equities of the case, orders otherwise with respect to the
obligations or timely performance thereof. This subsection shall not be
deemed to affect the trustee's obligations under the provisions of subsection
(b) or (f).
Acceptance of any such performance does not constitute waiver or
relinquishment of the lessor's rights under such lease or under this title.
(e)
(1) Notwithstanding a provision in an executory
contract or unexpired lease, or in applicable law, an executory contract or
unexpired lease of the debtor may not be terminated or modified, and any
right or obligation under such contract or lease may not be terminated or
modified, at any time after the commencement of the case solely because of a
provision in such contract or lease that is conditioned on--
(A) the insolvency or financial condition of the debtor at any time
before the closing of the case;
(B) the commencement of a case under this title; or
(C) the appointment of or taking possession by a trustee in a case
under this title or a custodian before such commencement.
(2) Paragraph (1) of this subsection does not
apply to an executory contract or unexpired lease of the debtor, whether or
not such contract or lease prohibits or restricts assignment of rights or
delegation of duties, if--
(A)
(i) applicable law excuses a party, other than the debtor, to such
contract or lease from accepting performance from or rendering performance
to the trustee or to an assignee of such contract or lease, whether or not
such contract or lease prohibits or restricts assignment of rights or
delegation of duties; and
(ii) such party does not consent to such assumption or assignment; or
(B) such contract is a contract to make a loan, or extend other debt
financing or financial accommodations, to or for the benefit of the debtor,
or to issue a security of the debtor.
(f)
(1) Except as provided in subsections
(b) and (c)
of this section, notwithstanding a provision in an executory contract or
unexpired lease of the debtor, or in applicable law, that prohibits,
restricts, or conditions the assignment of such contract or lease, the
trustee may assign such contract or lease under paragraph (2) of this
subsection.
(2) The trustee may assign an executory contract or unexpired lease of
the debtor only if--
(A) the trustee assumes such contract or lease in accordance with the
provisions of this section; and
(B) adequate assurance of future performance by the assignee of such
contract or lease is provided, whether or not there has been a default in
such contract or lease.
(3) Notwithstanding a provision in an executory contract or unexpired
lease of the debtor, or in applicable law that terminates or modifies, or
permits a party other than the debtor to terminate or modify, such contract
or lease or a right or obligation under such contract or lease on account of
an assignment of such contract or lease, such contract, lease, right, or
obligation may not be terminated or modified under such provision because of
the assumption or assignment of such contract or lease by the trustee.
(g) Except as provided in subsections
(h)(2) and (i)(2)
of this section, the rejection of an executory contract or unexpired lease of
the debtor constitutes a breach of such contract or lease--
(1) if such contract or lease has not been assumed under this section or
under a plan confirmed under chapter
9, 11, 12,
or 13
of this title, immediately before the date of the filing of the petition; or
(2) if such contract or lease has been assumed under this section or
under a plan confirmed under chapter
9, 11,
12,
or 13
of this title--
(A) if before such rejection the case has not been converted under section
1112, 1208,
or 1307
of this title, at the time of such rejection; or
(B) if before such rejection the case has been converted under section
1112, 1208,
or 1307
of this title--
(i) immediately before the date of such conversion, if such contract
or lease was assumed before such conversion; or
(ii) at the time of such rejection, if such contract or lease was
assumed after such conversion.
(h)
(1)
(A) If the trustee rejects an unexpired lease of real property under
which the debtor is the lessor and--
(i) if the rejection by the trustee amounts to such a breach as
would entitle the lessee to treat such lease as terminated by virtue
of its terms, applicable nonbankruptcy law, or any agreement made by
the lessee, then the lessee under such lease may treat such lease as
terminated by the rejection; or
(ii) if the term of such lease has commenced, the lessee may retain
its rights under such lease (including rights such as those relating
to the amount and timing of payment of rent and other amounts payable
by the lessee and any right of use, possession, quiet enjoyment,
subletting, assignment, or hypothecation) that are in or appurtenant
to the real property for the balance of the term of such lease and for
any renewal or extension of such rights to the extent that such rights
are enforceable under applicable nonbankruptcy law.
(B) If the lessee retains its rights under subparagraph (A)(ii), the
lessee may offset against the rent reserved under such lease for the
balance of the term after the date of the rejection of such lease and
for the term of any renewal or extension of such lease, the value of any
damage caused by the nonperformance after the date of such rejection, of
any obligation of the debtor under such lease, but the lessee shall not
have any other right against the estate or the debtor on account of any
damage occurring after such date caused by such nonperformance.
(C) The rejection of a lease of real property in a shopping center
with respect to which the lessee elects to retain its rights under
subparagraph (A)(ii) does not affect the enforceability under applicable
nonbankruptcy law of any provision in the lease pertaining to radius,
location, use, exclusivity, or tenant mix or balance.
(D) In this paragraph, “lessee” includes any successor, assign,
or mortgagee permitted under the terms of such lease.
(2)
(A) If the trustee rejects a timeshare interest under a timeshare
plan under which the debtor is the timeshare interest seller and--
(i) if the rejection amounts to such a breach as would entitle the
timeshare interest purchaser to treat the timeshare plan as terminated
under its terms, applicable nonbankruptcy law, or any agreement made
by timeshare interest purchaser, the timeshare interest purchaser
under the timeshare plan may treat the timeshare plan as terminated by
such rejection; or
(ii) if the term of such timeshare interest has commenced, then the
timeshare interest purchaser may retain its rights in such timeshare
interest for the balance of such term and for any term of renewal or
extension of such timeshare interest to the extent that such rights
are enforceable under applicable nonbankruptcy law.
(B) If the timeshare interest purchaser retains its rights under
subparagraph (A), such timeshare interest purchaser may offset against
the moneys due for such timeshare interest for the balance of the term
after the date of the rejection of such timeshare interest, and the term
of any renewal or extension of such timeshare interest, the value of any
damage caused by the nonperformance after the date of such rejection, of
any obligation of the debtor under such timeshare plan, but the
timeshare interest purchaser shall not have any right against the estate
or the debtor on account of any damage occurring after such date caused
by such nonperformance.
(i)
(1) If the trustee rejects an executory contract of the debtor for the
sale of real property or for the sale of a timeshare interest under a
timeshare plan, under which the purchaser is in possession, such purchaser
may treat such contract as terminated, or, in the alternative, may remain
in possession of such real property or timeshare interest.
(2) If such purchaser remains in possession--
(A) such purchaser shall continue to make all payments due under such
contract, but may, offset against such payments any damages occurring
after the date of the rejection of such contract caused by the
nonperformance of any obligation of the debtor after such date, but
such purchaser does not have any rights against the estate on account of
any damages arising after such date from such rejection, other than such
offset; and
(B) the trustee shall deliver title to such purchaser in accordance
with the provisions of such contract, but is relieved of all other
obligations to perform under such contract.
(j) A purchaser that treats an executory contract as
terminated under subsection
(i) of this section, or a party whose executory contract to purchase
real property from the debtor is rejected and under which such party is not
in possession, has a lien on the interest of the debtor in such property for
the recovery of any portion of the purchase price that such purchaser or
party has paid.
(k) Assignment by the trustee to an entity of a
contract or lease assumed under this section relieves the trustee and the
estate from any liability for any breach of such contract or lease occurring
after such assignment.
(l) If an unexpired lease under which the debtor is
the lessee is assigned pursuant to this section, the lessor of the property
may require a deposit or other security for the performance of the
debtor’s obligations under the lease substantially the same as would have
been required by the landlord upon the initial leasing to a similar tenant.
(m) For purposes of this section
365 and sections
541(b)(2) and 362(b)(10),
leases of real property shall include any rental agreement to use real
property.
(n)
(1) If the trustee rejects an executory contract under which the debtor
is a licensor of a right to intellectual property, the licensee under such
contract may elect--
(A) to treat such contract as terminated by such rejection if such
rejection by the trustee amounts to such a breach as would entitle the
licensee to treat such contract as terminated by virtue of its own
terms, applicable nonbankruptcy law, or an agreement made by the
licensee with another entity; or
(B) to retain its rights (including a right to enforce any
exclusivity provision of such contract, but excluding any other right
under applicable nonbankruptcy law to specific performance of such
contract) under such contract and under any agreement supplementary to
such contract, to such intellectual property (including any embodiment
of such intellectual property to the extent protected by applicable
nonbankruptcy law), as such rights existed immediately before the case
commenced, for--
(i) the duration of such contract; and
(ii) any period for which such contract may be extended by the
licensee as of right under applicable nonbankruptcy law.
(2) If the licensee elects to retain its rights, as described in
paragraph (1)(B) of this subsection, under such contract--
(A) the trustee shall allow the licensee to exercise such rights;
(B) the licensee shall make all royalty payments due under such
contract for the duration of such contract and for any period described
in paragraph (1)(B) of this subsection for which the licensee extends
such contract; and
(C) the licensee shall be deemed to waive--
(i) any right of setoff it may have with respect to such contract
under this title or applicable nonbankruptcy law; and
(ii) any claim allowable under section
503(b) of this title arising from the performance of such
contract.
(3) If the licensee elects to retain its rights, as described in
paragraph (1)(B) of this subsection, then on the written request of the
licensee the trustee shall--
(A) to the extent provided in such contract, or any agreement
supplementary to such contract, provide to the licensee any intellectual
property (including such embodiment) held by the trustee; and
(B) not interfere with the rights of the licensee as provided in such
contract, or any agreement supplementary to such contract, to such
intellectual property (including such embodiment) including any right to
obtain such intellectual property (or such embodiment) from another
entity.
(4) Unless and until the trustee rejects such contract, on the written
request of the licensee the trustee shall--
(A) to the extent provided in such contract or any agreement
supplementary to such contract--
(i) perform such contract; or
(ii) provide to the licensee such intellectual property (including
any embodiment of such intellectual property to the extent protected
by applicable nonbankruptcy law) held by the trustee; and
(B) not interfere with the rights of the licensee as provided in such
contract, or any agreement supplementary to such contract, to such
intellectual property (including such embodiment), including any right
to obtain such intellectual property (or such embodiment) from another
entity.
(o) In a case under chapter
11 of this title, the trustee shall be deemed to have assumed
(consistent with the debtor’s other obligations under section
507), and shall immediately cure any deficit under, any commitment by
the debtor to a Federal depository institutions regulatory agency (or
predecessor to such agency) to maintain the capital of an insured depository
institution, and any claim for a subsequent breach of the obligations
thereunder shall be entitled to priority under section
507. This subsection shall not extend any commitment that would
otherwise be terminated by any act of such an agency.
(p)
(1) If a lease of personal property is rejected or not
timely assumed by the trustee under subsection
(d), the leased property is no longer property of the estate and the
stay under section
362(a) is automatically terminated.
(2)
(A) If the debtor in a case under chapter
7 is an individual, the debtor may notify the creditor in writing
that the debtor desires to assume the lease. Upon being so notified, the
creditor may, at its option, notify the debtor that it is willing to
have the lease assumed by the debtor and may condition such assumption
on cure of any outstanding default on terms set by the contract.
(B) If, not later than 30 days after notice is
provided under subparagraph (A), the debtor notifies the lessor in
writing that the lease is assumed, the liability under the lease will be
assumed by the debtor and not by the estate.
(C) The stay under section
362 and the injunction under section
524(a)(2) shall not be violated by notification of the debtor and
negotiation of cure under this subsection.
(3) In a case under chapter
11 in which the debtor is an individual and in a case under chapter
13, if the debtor is the lessee with respect to personal property and
the lease is not assumed in the plan confirmed by the court, the lease is
deemed rejected as of the conclusion of the hearing on confirmation. If
the lease is rejected, the stay under section
362 and any stay under section
1301 is automatically terminated with respect to the property subject
to the lease.
[Rev. 5-4-05]
11
USC § 366. Utility service
(a) Except as provided in subsections
(b) and (c) of this section, a utility may not alter, refuse, or
discontinue service to, or discriminate against, the trustee or the debtor
solely on the basis of the commencement of a case under this title or that a
debt owed by the debtor to such utility for service rendered before the order
for relief was not paid when due.
(b) Such utility may alter, refuse, or discontinue service if neither the
trustee nor the debtor, within 20 days after the date of the order for relief,
furnishes adequate assurance of payment, in the form of a deposit or other
security, for service after such date. On request of a party in interest and
after notice and a hearing, the court may order reasonable modification of the
amount of the deposit or other security necessary to provide adequate
assurance of payment.
(c)
(1)
(A) For purposes of this subsection, the term
`assurance of payment' means--
(i) a cash deposit;
(ii) a letter of credit;
(iii) a certificate of deposit;
(iv) a surety bond;
(v) a prepayment of utility consumption; or
(vi) another form of security that is mutually agreed on between the
utility and the debtor or the trustee.
(B) For purposes of this subsection an administrative expense priority
shall not constitute an assurance of payment.
(2) Subject to paragraphs (3) and (4), with respect to a case filed
under chapter 11,
a utility referred to in subsection (a) may alter, refuse, or discontinue
utility service, if during the 30-day period beginning on the date of the
filing of the petition, the utility does not receive from the debtor or
the trustee adequate assurance of payment for utility service that is
satisfactory to the utility.
(3)
(A) On request of a party in interest and after notice and a hearing,
the court may order modification of the amount of an assurance of
payment under paragraph (2).
(B) In making a determination under this paragraph whether an
assurance of payment is adequate, the court may not consider--
(i) the absence of security before the date of the filing of the
petition;
(ii) the payment by the debtor of charges for utility service in a
timely manner before the date of the filing of the petition; or
(iii) the availability of an administrative expense priority.
(4) Notwithstanding any other provision of law, with respect to a case
subject to this subsection, a utility may recover or set off against a
security deposit provided to the utility by the debtor before the date of
the filing of the petition without notice or order of the court.
[Rev. 5-5-05]
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