[House Report 116-171]
[From the U.S. Government Publishing Office]
116th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 116-171
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SMALL BUSINESS REORGANIZATION ACT OF 2019
_______
July 23, 2019.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Nadler, from the Committee on the Judiciary, submitted the
following
R E P O R T
[To accompany H.R. 3311]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 3311) to amend chapter 11 of title 11, United States
Code, to address reorganization of small businesses, and for
other purposes, having considered the same, report favorably
thereon without amendment and recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 1
Background and Need for the Legislation.......................... 2
Hearings......................................................... 4
Committee Consideration.......................................... 5
Committee Votes.................................................. 5
Committee Oversight Findings..................................... 5
New Budget Authority and Tax Expenditures and Congressional
Budget Office Cost Estimate.................................... 5
Duplication of Federal Programs.................................. 5
Performance Goals and Objectives................................. 5
Advisory on Earmarks............................................. 6
Section-by-Section Analysis...................................... 6
Changes in Existing Law Made by the Bill, as Reported............ 9
Purpose and Summary
H.R. 3311, the ``Small Business Reorganization Act of
2019,'' would streamline the bankruptcy process by which small
businesses debtors reorganize and rehabilitate their financial
affairs. This bipartisan measure was introduced by
Representative Ben Cline (R-VA) together with Antitrust,
Commercial, and Administrative Law Subcommittee (ACAL
Subcommittee) Chairman David N. Cicilline (D-RI), Full
Committee Ranking Member Doug Collins (R-GA) and Representative
Steve Cohen (D-TN) as original cosponsors. H.R. 3311 is
supported by various nonpartisan organizations, including the
American Bankruptcy Institute (ABI),\1\ the National Bankruptcy
Conference (NBC),\2\ the American College of Bankruptcy,\3\ and
the National Conference of Bankruptcy Judges.\4\
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\1\Oversight of Bankruptcy Law and Legislative Proposals: Hearing
Before the Subcomm. on Antitrust, Commercial, & Admin. Law of the H.
Comm. on the Judiciary, 116th Cong. (2019) (prepared statement of
Robert J. Keach, Am. Bankr. Inst.).
\2\Id. (prepared statement of Thomas Small, Nat'l Bankr. Conf.).
\3\Letter from Marc A. Levinson, Chair, Am. Coll. of Bankr., and
Mark D. Bloom, Pres., Am. Coll. of Bankr., to Rep. Jerrold Nadler (D-
NY), Chair, H. Comm. on the Judiciary, and Rep. Doug Collins (R-GA),
Ranking Member, H. Comm. on the Judiciary (June 14, 2019).
\4\Letter from John E. Waites, President, Nat'l Conf. of Bankr.
Judges, to Rep. Jerrold Nadler (D-NY), Chair, H. Comm. on the
Judiciary, and Rep. Doug Collins (R-GA), Ranking Member, H. Comm. on
the Judiciary (June 21, 2019).
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Background and Need for the Legislation
BACKGROUND
Small businesses--typically family-owned businesses,
startups, and other entrepreneurial ventures--``form the
backbone of the American economy.''\5\ For example, it is
estimated that ```companies with 50 to 5,000 employees account
for more employment than those with over 5,000.'''\6\ By their
very nature, however, the longevity of these businesses is
limited. According to the Small Business Administration Office
of Advocacy, approximately 20 percent of small businesses
survive the first year, but by the five-year mark only 50
percent are still in business and by the ten-year mark only
one-third survive.\7\
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\5\Am. Bankr. Inst., Final Report and Recommendations of the
Commission to Study the Reform of Chapter 11, at 276 (2014) (quoting
Deloitte Development LLC, Mid-Market Perspectives: America's Economic
Engine--Competing in Uncertain Times 4 (2011)).
\6\Id.
\7\Chad Itar, What Percentage of Small Businesses Fail--And How Can
You Avoid Being One of Them, Forbes: Community Voice (Oct. 25, 2018),
https://www.forbes.com/sites/forbesfinancecouncil/2018/10/25/what-
percentage-of-small-businesses-fail-and-how-can-you-avoid-being-one-of-
them/#76f7489c43b5.
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Chapter 11 is a form of bankruptcy relief that is typically
used by businesses to reorganize their financial affairs. Under
the protection of chapter 11, a debtor is given a ``financial
breathing spell'' from most creditor collection efforts. This
protection allows the chapter 11 debtor to continue its
business operations while formulating a plan of reorganization
to repay its creditors. In general, the chapter 11 process
requires the debtor to propose a plan of reorganization
pursuant to which the debtor commits to repay its creditors. It
is similar to a contract that creditors can enforce in the
bankruptcy court should the debtor fail to adhere to the plan's
requirements. The plan is voted upon by the debtor's creditors
and the bankruptcy court must make certain findings (e.g., the
plan was proposed in good faith and it complies with specified
payment priorities). If the court is satisfied, then the plan
is confirmed and the debtor is no longer in chapter 11.\8\
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\8\11 U.S.C. Sec. 1129 (2019).
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If a chapter 11 case is unsuccessful, the case is usually
converted to one under chapter 7, which is a form of bankruptcy
relief that provides for the orderly liquidation of the
debtor's assets for distribution to its creditors.\9\
Alternatively, the case may be dismissed, whichever is in the
best interests of creditors and the bankruptcy estate.\10\
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\9\11 U.S.C. Sec. 1112(b) (2019).
\10\Id.
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Not surprisingly, while most chapter 11 business cases are
filed by small business debtors, they are often ``the least
likely to reorganize successfully.''\11\ While the Bankruptcy
Code envisions that creditors will play a major role in
monitoring these cases, this often does not occur, chiefly
because creditors in these smaller cases do not have claims
large enough to warrant the time and money to participate
actively in these cases.
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\11\H.R. Rep. No. 109-31, at 3 (2005); see, e.g., Susan Jensen-
Conklin, Do Confirmed Chapter 11 Plans Consummate? The Results of a
Study and Analysis of the Law, 97 Com. L.J. 297, 325 (1992) (finding
that only 6.5% of debtors confirmed and completed a reorganization
plan, seemingly making saving a business under Chapter 11 very
unlikely).
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In response to this concern, Congress passed legislation in
2005 requiring heightened scrutiny of such cases and
streamlining the reorganization process.\12\ The legislation
sought to address ``the special problems presented by small
business cases by instituting a variety of time frames and
enforcement mechanisms designed to weed out small business
debtors who are not likely to reorganize. It also requires
these cases to be more actively monitored by United States
trustees\13\ and the bankruptcy courts.''\14\ Specifically,
with respect to small business cases, the United States trustee
is required to:
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\12\Bankruptcy Abuse Prevention and Consumer Protection Act of
2005, Pub. L. No. 109-8, 119 Stat. 23, 59 (2005).
\13\The United States Trustee Program is a component of the U.S.
Justice Department charged with maintaining the integrity of the
bankruptcy system and, in pertinent part, supervising the
administration of chapter 11 cases. 28 U.S.C. Sec. 586(a)(3) (2019).
\14\H.R. Rep. No. 109-31, at 19 (2005).
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(A) conduct an initial debtor interview as soon as
practicable after the date of the order for relief but before
the first meeting scheduled under section 341(a) of title 11,
at which time the United States trustee shall--
(i) begin to investigate the debtor's viability;
(ii) inquire about the debtor's business plan;
(iii) explain the debtor's obligations to file
monthly operating reports and other required reports;
(iv) attempt to develop an agreed scheduling order;
and
(v) inform the debtor of other obligations;
(B) if determined to be appropriate and advisable, visit
the appropriate business premises of the debtor, ascertain the
state of the debtor's books and records, and verify that the
debtor has filed its tax returns; and
(C) review and monitor diligently the debtor's activities,
to determine as promptly as possible whether the debtor will be
unable to confirm a plan[.]\15\
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\15\28 U.S.C. Sec. 586(a)(7) (2019). In addition, the United States
trustee is obligated to promptly seek dismissal or conversion of a
chapter 11 case if material grounds for such relief exist. 28 U.S.C.
Sec. 586(a)(8) (2019).
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The United States Trustee Program is also charged with
appointing individuals from the private sector to serve as
trustees in all consumer chapter 7 and chapter 13 bankruptcy
cases as well as in family farmer chapter 12 cases.\16\ In
addition, the Program may designate an individual to serve as
trustee in a chapter 11 case for cause, including ``fraud,
dishonesty, incompetence, or gross mismanagement,'' among other
grounds.\17\
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\16\28 U.S.C. Sec. 586(a)(1)-(b) (2019).
\17\11 U.S.C. Sec. 1104(a) (2019); 28 U.S.C. Sec. 586(a)(2) (2019).
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NEED FOR THE LEGISLATION
Notwithstanding the 2005 Amendments, small business chapter
11 cases continue to encounter difficulty in successfully
reorganizing. Based upon their respective reviews of this
issue, the NBC and the ABI developed recommendations to improve
the reorganization process for small business chapter 11
debtors. H.R. 3311 is largely derived from these
recommendations. As the bill's sponsor, Representative Ben
Cline (R-VA), explained at the hearing held by the Subcommittee
on Antitrust, Commercial, and Administrative Law on June 25,
2019 at which H.R. 3311 was considered, the legislation allows
these debtors ``to file bankruptcy in a timely, cost-effective
manner, and hopefully allows them to remain in business'' which
``not only benefits the owners, but employees, suppliers,
customers, and others who rely on that business.''\18\
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\18\Unofficial Tr. of Oversight of Bankruptcy Law and Legislative
Proposals: Hearing Before the Subcomm. on Antitrust, Commercial, &
Admin. Law of the H. Comm. on the Judiciary, 116th Cong. 27 (2019) (on
file with H. Comm. on the Judiciary staff).
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The principal features of H.R. 3311 consist of the
following: (1) requiring the appointment of an individual to
serve as the trustee in a chapter 11 case filed by a small
business debtor, who would perform many of the same duties
required of a chapter 12 trustee; (2) requiring such private
trustee to monitor the debtor's progress toward confirmation of
a reorganization plan; and (3) authorizing the court to confirm
a plan over the objection of the debtor's creditors, providing
such plan does not discriminate unfairly, and is fair and
equitable, with respect to each class of claims or interests
that is impaired under, and has not accepted, the plan.
The bill also includes two provisions, not limited to small
business chapter 11 cases, pertaining to preferential
transfers. In sum, it specifies an additional criterion that a
trustee must consider before commencing an action to recover a
preferential transfer (i.e., a transfer of property by the
debtor made before the filing of the bankruptcy case
preferential to a creditor and to the detriment of similarly
situated creditors). The first provision would require the
trustee to determine whether to exercise such authority based
on reasonable due diligence in the circumstances of the case
and take into account a party's known or reasonably knowable
affirmative defenses. The second provision concerns the venue
where such preferential transfer actions may be commenced.
Current law requires this type of action to be commenced in the
district where the defendant resides if the amount sought to be
recovered by the action is less than $13,650.\19\ H.R. 3311
would increase this monetary limit to $25,000.
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\19\28 U.S.C. Sec. 1409(b) (2019).
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Hearings
For the purposes of section 103(i) of H. Res. 6 of the
116th Congress, the following hearing was used to consider H.R.
3311: ``Oversight of Bankruptcy Law and Legislative
Proposals,'' which was held on June 25, 2019.\20\ The hearing
considered various legislative measures. Of pertinence to H.R.
3311, the following witnesses testified: Representative Ben
Cline (R-VA), the bill's sponsor; Robert J. Keach, on behalf of
the American Bankruptcy Institute; and former Bankruptcy Judge
Thomas Small on behalf of the National Bankruptcy Conference.
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\20\Oversight of Bankruptcy Law and Legislative Proposals: Hearing
Before the Subcomm. on Antitrust, Commercial, & Admin. Law of the H.
Comm. on the Judiciary, 116th Cong. (2019).
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Committee Consideration
On July 11, 2019, the Committee met in open session and
ordered the bill, H.R. 3311, favorably reported without
amendment by voice vote, a quorum being present.
Committee Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that no
rollcall votes occurred during the Committee's consideration of
H.R. 3311.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures and Congressional Budget
Office Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause (3)(c)(3) of rule XIII of the Rules
of the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has requested
but not received a cost estimate for this bill from the
Director of the Congressional Budget Office. The Committee has
requested but not received from the Director of the
Congressional Budget Office a statement as to whether this bill
contains any new budget authority, spending authority, credit
authority, or an increase or decrease in revenues or tax
expenditures.
Duplication of Federal Programs
No provision of H.R. 3311 establishes or reauthorizes a
program of the federal government known to be duplicative of
another federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R.
3311 would streamline the bankruptcy process by which small
businesses debtors reorganize and rehabilitate their financial
affairs.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 3311 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(d), 9(e), or 9(f) of rule XXI.
Section-by-Section Analysis
The following discussion describes the bill as reported by
the Committee.
Sec. 1. Short title. Section 1 sets forth the short title
of the bill as the ``Small Business Reorganization Act of
2019.''
Sec. 2. Reorganization of small business debtors. Section 2
adds a new subchapter V to chapter 11 of the Bankruptcy Code
consisting of provisions devoted to small business debtors.
New section 1181 specifies those provisions of the
Bankruptcy Code that are inapplicable to subchapter V cases.
New section 1182 defines the term debtor, for purposes of
subchapter V, as a small business debtor.
New section 1183 directs the United States trustee to
appoint an individual serving as a standing trustee to serve as
a trustee in any case under subchapter V. The trustee must
perform many of the same duties performed by a chapter 12
trustee. In a chapter 12 case, for example, the trustee serves
as a fiduciary for creditors and is accountable for all
property of the debtor as well as for ensuring the debtor makes
the payments as required by debtor's reorganization plan.\21\
Pursuant to section 1183, the trustee must participate in
certain conferences and hearings concerning matters pertaining
to the value of property subject to a lien, confirmation of a
reorganization plan and its modification post-confirmation, and
the sale of property of the estate. Among other duties, the
trustee must ensure that the debtor commences making timely
payments required under a confirmed plan. The trustee's service
terminates upon substantial consummation of the plan.
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\21\11 U.S.C. Sec. 1202 (2019).
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New section 1184 sets forth the rights and powers of a
subchapter V debtor in possession (i.e., the debtor remains in
control of the bankruptcy case).
New section 1185 provides that a subchapter V debtor may
lose its status as a debtor in possession if the court finds,
after notice and a hearing, that the debtor engaged in
fraudulent, dishonest, or incompetent behavior or grossly
mismanaged its financial affairs.
New section 1186 concerns property of the estate.
Subsection (a) provides that if a plan is confirmed, property
of the estate includes all property acquired by the debtor
after the date of commencement of the case, but before the case
is closed, dismissed, or converted to a case under chapter 7,
12, or 13 of title 11, whichever occurs first. It also includes
all earnings from services performed by the debtor during such
period. Subsection (b) provides that the debtor remains in
possession of all property of the estate unless the debtor is
removed from possession.
New section 1187 specifies various duties and reporting
requirements of a subchapter V debtor. In addition, it
clarifies that the separate disclosure statement exemption
applies unless the court orders otherwise.
New section 1188 requires the court to hold a status
conference to further the expeditious and economical resolution
of a case under this subchapter not less than 60 days after the
case is commenced, unless the court extends this period because
such extension is needed as a result of circumstances for which
the debtor should not justly be held accountable. In addition,
this provision requires the debtor, not later than 14 days
before the date of the status conference, to file with the
court and serve on the trustee and all parties in interest a
report that details the efforts the debtor has undertaken and
will undertake to attain a consensual plan of reorganization.
New section 1189 specifies that only the debtor may file a
plan of reorganization under subchapter V. In addition, it
directs the debtor to file such plan not later than 90 days
after the case is filed, unless the court extends this period
because of circumstances for which the debtor should not justly
be held accountable.
New section 1190 sets forth various requirements for the
plan of reorganization, including a brief history of the
business operations of the debtor; a liquidation analysis; and
projections with respect to the ability of the debtor to make
payments under the proposed plan of reorganization. In
addition, the plan must provide for the submission of all or
such portion of the future earnings or other future income of
the debtor to the supervision and control of the trustee as is
necessary for the execution of the plan. Section 1190 permits
the debtor to modify the rights of a holder of a claim secured
only by a security interest in real property that is the
principal residence of the debtor if the new value received in
connection with the granting of the security interest was not
used primarily to acquire the real property, but it was used
primarily in connection with the small business of the debtor.
New section 1191 specifies the criteria for confirming a
plan. It permits the court to confirm a plan even if a class of
claims or interests has rejected the plan providing that such
plan does not discriminate unfairly, and is fair and equitable,
with respect to each class of claims or interests that is
impaired under, and has not accepted, the plan.
With respect to the condition that a plan be fair and
equitable as to each class of claims or interests, section 1191
sets forth a rule of construction. As to a class of secured
claims, the plan must satisfy one of three alternative
requirements. First, the plan must ensure that the holders of
such claims retain their liens and that they receive on account
of their claims deferred cash payments totaling at least the
allowed amount of their claims, as valued on the plan's
effective date. Second, if the plan contemplates the sale of
property securing such claims, then the plan must provide that
the claimants' liens attach to the proceeds of such sale.
Third, if the plan contemplates neither, then the plan must
provide that the secured creditors receive the indubitable
equivalent of their claims.
In addition, the plan must provide that all of the
projected disposable income of the debtor to be received in the
three-year period, or such longer period not to exceed five
years as the court may fix, beginning on the date that the
first payment is due under the plan, will be applied to make
payments under the plan. Alternatively, the value of the
property to be distributed under the plan in the three-year
period, or such longer period not to exceed five years as the
court may fix--beginning on the date on which the first
distribution is due under the plan--is not less than the
projected disposable income of the debtor.
As a further condition of confirmation, the court must find
that: (1) the debtor will be able to make all payments under
the plan; or (2) there is a reasonable likelihood that the
debtor will be able to make all payments under the plan; and
the plan provides appropriate remedies, which may include the
liquidation of nonexempt assets, to protect the holders of
claims or interests in the event that the payments are not
made.
Section 1191 defines ``disposable income'' to mean the
income that is received by the debtor and that is not
reasonably necessary to be expended for: (1) the maintenance or
support of the debtor or a dependent of the debtor; (2) a
domestic support obligation that first becomes payable after
the date of the filing of the case; or (3) the payment of
expenditures necessary for the continuation, preservation, or
operation of the business of the debtor.
Finally, with respect to the payment of administrative
expenses (e.g., the debtor's attorneys' fees, the plan may
provide for their payment through the plan.
New section 1192 requires the court to grant the debtor a
discharge as soon as practicable after completion by the debtor
of all payments due within the first three years of the plan,
or such longer period not to exceed five years as the court may
fix. Such discharge pertains to all debts as provided under the
plan except any debt: (1) on which the last payment is due
after the first three years of the plan, or such other time not
to exceed five years fixed by the court; or (2) that is
otherwise nondischargeable.
New section 1193 sets forth the criteria for modifying a
plan pre- and post-confirmation.
New section 1194 pertains to the trustee's responsibilities
for collecting and distributing payments made by the debtor
pursuant to the plan.
New section 1195 provides that a person is not disqualified
for employment under section 327 of title 11 solely because
that person holds a claim of less than $10,000 that arose prior
to commencement of the case.
Sec. 3. Preferences; venue of certain proceedings.
Bankruptcy Code section 547(b) authorizes a trustee to avoid
certain prepetition transfers of property that, in sum, are
preferential to a creditor and to the detriment of similarly
situated creditors. Subsection (a) amends section 547(b) to
require the trustee to determine whether to exercise such
authority based on reasonable due diligence in the
circumstances of the case and taking into account a party's
known or reasonably knowable affirmative defenses.
Section 1409 of title 28 of the U.S. Code sets forth the
criteria for the venue of certain proceedings arising in
connection with a bankruptcy case. With respect to an action to
recover a debt against a noninsider of less than $13,650, such
proceeding must be commenced in the district court for the
district where the defendant resides. Subsection (b) would
increase this monetary limit to $25,000.
Sec. 4. Conforming amendments. Section 4 makes a series of
conforming amendments to the Bankruptcy Code.
Sec. 5. Effective date. Section 5 provides that the Act and
its amendments take effect 180 days after the date of
enactment.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
TITLE 11, UNITED STATES CODE
* * * * * * *
CHAPTER 1--GENERAL PROVISIONS
* * * * * * *
Sec. 101. Definitions
In this title the following definitions shall apply:
(1) The term ``accountant'' means accountant
authorized under applicable law to practice public
accounting, and includes professional accounting
association, corporation, or partnership, if so
authorized.
(2) The term ``affiliate'' means--
(A) entity that directly or indirectly owns,
controls, or holds with power to vote, 20
percent or more of the outstanding voting
securities of the debtor, other than an entity
that holds such securities--
(i) in a fiduciary or agency capacity
without sole discretionary power to
vote such securities; or
(ii) solely to secure a debt, if such
entity has not in fact exercised such
power to vote;
(B) corporation 20 percent or more of whose
outstanding voting securities are directly or
indirectly owned, controlled, or held with
power to vote, by the debtor, or by an entity
that directly or indirectly owns, controls, or
holds with power to vote, 20 percent or more of
the outstanding voting securities of the
debtor, other than an entity that holds such
securities--
(i) in a fiduciary or agency capacity
without sole discretionary power to
vote such securities; or
(ii) solely to secure a debt, if such
entity has not in fact exercised such
power to vote;
(C) person whose business is operated under a
lease or operating agreement by a debtor, or
person substantially all of whose property is
operated under an operating agreement with the
debtor; or
(D) entity that operates the business or
substantially all of the property of the debtor
under a lease or operating agreement.
(3) The term ``assisted person'' means any person
whose debts consist primarily of consumer debts and the
value of whose nonexempt property is less than
$150,000.
(4) The term ``attorney'' means attorney,
professional law association, corporation, or
partnership, authorized under applicable law to
practice law.
(4A) The term ``bankruptcy assistance'' means any
goods or services sold or otherwise provided to an
assisted person with the express or implied purpose of
providing information, advice, counsel, document
preparation, or filing, or attendance at a creditors'
meeting or appearing in a case or proceeding on behalf
of another or providing legal representation with
respect to a case or proceeding under this title.
(5) The term ``claim'' means--
(A) right to payment, whether or not such
right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal,
equitable, secured, or unsecured; or
(B) right to an equitable remedy for breach
of performance if such breach gives rise to a
right to payment, whether or not such right to
an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured,
disputed, undisputed, secured, or unsecured.
(6) The term ``commodity broker'' means futures
commission merchant, foreign futures commission
merchant, clearing organization, leverage transaction
merchant, or commodity options dealer, as defined in
section 761 of this title, with respect to which there
is a customer, as defined in section 761 of this title.
(7) The term ``community claim'' means claim that
arose before the commencement of the case concerning
the debtor for which property of the kind specified in
section 541(a)(2) of this title is liable, whether or
not there is any such property at the time of the
commencement of the case.
(7A) The term ``commercial fishing operation''
means--
(A) the catching or harvesting of fish,
shrimp, lobsters, urchins, seaweed, shellfish,
or other aquatic species or products of such
species; or
(B) for purposes of section 109 and chapter
12, aquaculture activities consisting of
raising for market any species or product
described in subparagraph (A).
(7B) The term ``commercial fishing vessel'' means a
vessel used by a family fisherman to carry out a
commercial fishing operation.
(8) The term ``consumer debt'' means debt incurred by
an individual primarily for a personal, family, or
household purpose.
(9) The term ``corporation''--
(A) includes--
(i) association having a power or
privilege that a private corporation,
but not an individual or a partnership,
possesses;
(ii) partnership association
organized under a law that makes only
the capital subscribed responsible for
the debts of such association;
(iii) joint-stock company;
(iv) unincorporated company or
association; or
(v) business trust; but
(B) does not include limited partnership.
(10) The term ``creditor'' means--
(A) entity that has a claim against the
debtor that arose at the time of or before the
order for relief concerning the debtor;
(B) entity that has a claim against the
estate of a kind specified in section 348(d),
502(f), 502(g), 502(h) or 502(i) of this title;
or
(C) entity that has a community claim.
(10A) The term ``current monthly income''--
(A) means the average monthly income from all
sources that the debtor receives (or in a joint
case the debtor and the debtor's spouse
receive) without regard to whether such income
is taxable income, derived during the 6-month
period ending on--
(i) the last day of the calendar
month immediately preceding the date of
the commencement of the case if the
debtor files the schedule of current
income required by section
521(a)(1)(B)(ii); or
(ii) the date on which current income
is determined by the court for purposes
of this title if the debtor does not
file the schedule of current income
required by section 521(a)(1)(B)(ii);
and
(B) includes any amount paid by any entity
other than the debtor (or in a joint case the
debtor and the debtor's spouse), on a regular
basis for the household expenses of the debtor
or the debtor's dependents (and in a joint case
the debtor's spouse if not otherwise a
dependent), but excludes benefits received
under the Social Security Act, payments to
victims of war crimes or crimes against
humanity on account of their status as victims
of such crimes, and payments to victims of
international terrorism (as defined in section
2331 of title 18) or domestic terrorism (as
defined in section 2331 of title 18) on account
of their status as victims of such terrorism.
(11) The term ``custodian'' means--
(A) receiver or trustee of any of the
property of the debtor, appointed in a case or
proceeding not under this title;
(B) assignee under a general assignment for
the benefit of the debtor's creditors; or
(C) trustee, receiver, or agent under
applicable law, or under a contract, that is
appointed or authorized to take charge of
property of the debtor for the purpose of
enforcing a lien against such property, or for
the purpose of general administration of such
property for the benefit of the debtor's
creditors.
(12) The term ``debt'' means liability on a claim.
(12A) The term ``debt relief agency'' means any
person who provides any bankruptcy assistance to an
assisted person in return for the payment of money or
other valuable consideration, or who is a bankruptcy
petition preparer under section 110, but does not
include--
(A) any person who is an officer, director,
employee, or agent of a person who provides
such assistance or of the bankruptcy petition
preparer;
(B) a nonprofit organization that is exempt
from taxation under section 501(c)(3) of the
Internal Revenue Code of 1986;
(C) a creditor of such assisted person, to
the extent that the creditor is assisting such
assisted person to restructure any debt owed by
such assisted person to the creditor;
(D) a depository institution (as defined in
section 3 of the Federal Deposit Insurance Act)
or any Federal credit union or State credit
union (as those terms are defined in section
101 of the Federal Credit Union Act), or any
affiliate or subsidiary of such depository
institution or credit union; or
(E) an author, publisher, distributor, or
seller of works subject to copyright protection
under title 17, when acting in such capacity.
(13) The term ``debtor'' means person or municipality
concerning which a case under this title has been
commenced.
(13A) The term ``debtor's principal residence''--
(A) means a residential structure if used as
the principal residence by the debtor,
including incidental property, without regard
to whether that structure is attached to real
property; and
(B) includes an individual condominium or
cooperative unit, a mobile or manufactured
home, or trailer if used as the principal
residence by the debtor.
(14) The term ``disinterested person'' means a person
that--
(A) is not a creditor, an equity security
holder, or an insider;
(B) is not and was not, within 2 years before
the date of the filing of the petition, a
director, officer, or employee of the debtor;
and
(C) does not have an interest materially
adverse to the interest of the estate or of any
class of creditors or equity security holders,
by reason of any direct or indirect
relationship to, connection with, or interest
in, the debtor, or for any other reason.
(14A) The term ``domestic support obligation'' means
a debt that accrues before, on, or after the date of
the order for relief in a case under this title,
including interest that accrues on that debt as
provided under applicable nonbankruptcy law
notwithstanding any other provision of this title, that
is--
(A) owed to or recoverable by--
(i) a spouse, former spouse, or child
of the debtor or such child's parent,
legal guardian, or responsible
relative; or
(ii) a governmental unit;
(B) in the nature of alimony, maintenance, or
support (including assistance provided by a
governmental unit) of such spouse, former
spouse, or child of the debtor or such child's
parent, without regard to whether such debt is
expressly so designated;
(C) established or subject to establishment
before, on, or after the date of the order for
relief in a case under this title, by reason of
applicable provisions of--
(i) a separation agreement, divorce
decree, or property settlement
agreement;
(ii) an order of a court of record;
or
(iii) a determination made in
accordance with applicable
nonbankruptcy law by a governmental
unit; and
(D) not assigned to a nongovernmental entity,
unless that obligation is assigned voluntarily
by the spouse, former spouse, child of the
debtor, or such child's parent, legal guardian,
or responsible relative for the purpose of
collecting the debt.
(15) The term ``entity'' includes person, estate,
trust, governmental unit, and United States trustee.
(16) The term ``equity security'' means--
(A) share in a corporation, whether or not
transferable or denominated ``stock'', or
similar security;
(B) interest of a limited partner in a
limited partnership; or
(C) warrant or right, other than a right to
convert, to purchase, sell, or subscribe to a
share, security, or interest of a kind
specified in subparagraph (A) or (B) of this
paragraph.
(17) The term ``equity security holder'' means holder
of an equity security of the debtor.
(18) The term ``family farmer'' means--
(A) individual or individual and spouse
engaged in a farming operation whose aggregate
debts do not exceed $3,237,000 and not less
than 50 percent of whose aggregate
noncontingent, liquidated debts (excluding a
debt for the principal residence of such
individual or such individual and spouse unless
such debt arises out of a farming operation),
on the date the case is filed, arise out of a
farming operation owned or operated by such
individual or such individual and spouse, and
such individual or such individual and spouse
receive from such farming operation more than
50 percent of such individual's or such
individual and spouse's gross income for--
(i) the taxable year preceding; or
(ii) each of the 2d and 3d taxable
years preceding;
the taxable year in which the case concerning
such individual or such individual and spouse
was filed; or
(B) corporation or partnership in which more
than 50 percent of the outstanding stock or
equity is held by one family, or by one family
and the relatives of the members of such
family, and such family or such relatives
conduct the farming operation, and
(i) more than 80 percent of the value
of its assets consists of assets
related to the farming operation;
(ii) its aggregate debts do not
exceed $3,237,000 and not less than 50
percent of its aggregate noncontingent,
liquidated debts (excluding a debt for
one dwelling which is owned by such
corporation or partnership and which a
shareholder or partner maintains as a
principal residence, unless such debt
arises out of a farming operation), on
the date the case is filed, arise out
of the farming operation owned or
operated by such corporation or such
partnership; and
(iii) if such corporation issues
stock, such stock is not publicly
traded.
(19) The term ``family farmer with regular annual
income'' means family farmer whose annual income is
sufficiently stable and regular to enable such family
farmer to make payments under a plan under chapter 12
of this title.
(19A) The term ``family fisherman'' means--
(A) an individual or individual and spouse
engaged in a commercial fishing operation--
(i) whose aggregate debts do not
exceed $1,500,000 and not less than
80 percent of whose aggregate
noncontingent, liquidated debts
(excluding a debt for the principal
residence of such individual or such
individual and spouse, unless such debt
arises out of a commercial fishing
operation), on the date the case is
filed, arise out of a commercial
fishing operation owned or operated by
such individual or such individual and
spouse; and
(ii) who receive from such commercial
fishing operation more than 50 percent
of such individual's or such
individual's and spouse's gross income
for the taxable year preceding the
taxable year in which the case
concerning such individual or such
individual and spouse was filed; or
(B) a corporation or partnership--
(i) in which more than 50 percent of
the outstanding stock or equity is held
by--
(I) 1 family that conducts
the commercial fishing
operation; or
(II) 1 family and the
relatives of the members of
such family, and such family or
such relatives conduct the
commercial fishing operation;
and
(ii)(I) more than 80 percent of the
value of its assets consists of assets
related to the commercial fishing
operation;
(II) its aggregate debts do
not exceed $1,500,000 and not
less than 80 percent of its
aggregate noncontingent,
liquidated debts (excluding a
debt for 1 dwelling which is
owned by such corporation or
partnership and which a
shareholder or partner
maintains as a principal
residence, unless such debt
arises out of a commercial
fishing operation), on the date
the case is filed, arise out of
a commercial fishing operation
owned or operated by such
corporation or such
partnership; and
(III) if such corporation
issues stock, such stock is not
publicly traded.
(19B) The term ``family fisherman with regular annual
income'' means a family fisherman whose annual income
is sufficiently stable and regular to enable such
family fisherman to make payments under a plan under
chapter 12 of this title.
(20) The term ``farmer'' means (except when such term
appears in the term ``family farmer'') person that
received more than 80 percent of such person's gross
income during the taxable year of such person
immediately preceding the taxable year of such person
during which the case under this title concerning such
person was commenced from a farming operation owned or
operated by such person.
(21) The term ``farming operation'' includes farming,
tillage of the soil, dairy farming, ranching,
production or raising of crops, poultry, or livestock,
and production of poultry or livestock products in an
unmanufactured state.
(21A) The term ``farmout agreement'' means a written
agreement in which--
(A) the owner of a right to drill, produce,
or operate liquid or gaseous hydrocarbons on
property agrees or has agreed to transfer or
assign all or a part of such right to another
entity; and
(B) such other entity (either directly or
through its agents or its assigns), as
consideration, agrees to perform drilling,
reworking, recompleting, testing, or similar or
related operations, to develop or produce
liquid or gaseous hydrocarbons on the property.
(21B) The term ``Federal depository institutions
regulatory agency'' means--
(A) with respect to an insured depository
institution (as defined in section 3(c)(2) of
the Federal Deposit Insurance Act) for which no
conservator or receiver has been appointed, the
appropriate Federal banking agency (as defined
in section 3(q) of such Act);
(B) with respect to an insured credit union
(including an insured credit union for which
the National Credit Union Administration has
been appointed conservator or liquidating
agent), the National Credit Union
Administration;
(C) with respect to any insured depository
institution for which the Resolution Trust
Corporation has been appointed conservator or
receiver, the Resolution Trust Corporation; and
(D) with respect to any insured depository
institution for which the Federal Deposit
Insurance Corporation has been appointed
conservator or receiver, the Federal Deposit
Insurance Corporation.
(22) The term ``financial institution'' means--
(A) a Federal reserve bank, or an entity that
is a commercial or savings bank, industrial
savings bank, savings and loan association,
trust company, federally-insured credit union,
or receiver, liquidating agent, or conservator
for such entity and, when any such Federal
reserve bank, receiver, liquidating agent,
conservator or entity is acting as agent or
custodian for a customer (whether or not a
``customer'', as defined in section 741) in
connection with a securities contract (as
defined in section 741) such customer; or
(B) in connection with a securities contract
(as defined in section 741) an investment
company registered under the Investment Company
Act of 1940.
(22A) The term ``financial participant'' means--
(A) an entity that, at the time it enters
into a securities contract, commodity contract,
swap agreement, repurchase agreement, or
forward contract, or at the time of the date of
the filing of the petition, has one or more
agreements or transactions described in
paragraph (1), (2), (3), (4), (5), or (6) of
section 561(a) with the debtor or any other
entity (other than an affiliate) of a total
gross dollar value of not less than
$1,000,000,000 in notional or actual principal
amount outstanding (aggregated across
counterparties) at such time or on any day
during the 15-month period preceding the date
of the filing of the petition, or has gross
mark-to-market positions of not less than
$100,000,000 (aggregated across counterparties)
in one or more such agreements or transactions
with the debtor or any other entity (other than
an affiliate) at such time or on any day during
the 15-month period preceding the date of the
filing of the petition; or
(B) a clearing organization (as defined in
section 402 of the Federal Deposit Insurance
Corporation Improvement Act of 1991).
(23) The term ``foreign proceeding'' means a
collective judicial or administrative proceeding in a
foreign country, including an interim proceeding, under
a law relating to insolvency or adjustment of debt in
which proceeding the assets and affairs of the debtor
are subject to control or supervision by a foreign
court, for the purpose of reorganization or
liquidation.
(24) The term ``foreign representative'' means a
person or body, including a person or body appointed on
an interim basis, authorized in a foreign proceeding to
administer the reorganization or the liquidation of the
debtor's assets or affairs or to act as a
representative of such foreign proceeding.
(25) The term ``forward contract'' means--
(A) a contract (other than a commodity
contract, as defined in section 761) for the
purchase, sale, or transfer of a commodity, as
defined in section 761(8) of this title, or any
similar good, article, service, right, or
interest which is presently or in the future
becomes the subject of dealing in the forward
contract trade, or product or byproduct
thereof, with a maturity date more than two
days after the date the contract is entered
into, including, but not limited to, a
repurchase or reverse repurchase transaction
(whether or not such repurchase or reverse
repurchase transaction is a ``repurchase
agreement'', as defined in this section)
consignment, lease, swap, hedge transaction,
deposit, loan, option, allocated transaction,
unallocated transaction, or any other similar
agreement;
(B) any combination of agreements or
transactions referred to in subparagraphs (A)
and (C);
(C) any option to enter into an agreement or
transaction referred to in subparagraph (A) or
(B);
(D) a master agreement that provides for an
agreement or transaction referred to in
subparagraph (A), (B), or (C), together with
all supplements to any such master agreement,
without regard to whether such master agreement
provides for an agreement or transaction that
is not a forward contract under this paragraph,
except that such master agreement shall be
considered to be a forward contract under this
paragraph only with respect to each agreement
or transaction under such master agreement that
is referred to in subparagraph (A), (B), or
(C); or
(E) any security agreement or arrangement, or
other credit enhancement related to any
agreement or transaction referred to in
subparagraph (A), (B), (C), or (D), including
any guarantee or reimbursement obligation by or
to a forward contract merchant or financial
participant in connection with any agreement or
transaction referred to in any such
subparagraph, but not to exceed the damages in
connection with any such agreement or
transaction, measured in accordance with
section 562.
(26) The term ``forward contract merchant'' means a
Federal reserve bank, or an entity the business of
which consists in whole or in part of entering into
forward contracts as or with merchants in a commodity
(as defined in section 761) or any similar good,
article, service, right, or interest which is presently
or in the future becomes the subject of dealing in the
forward contract trade.
(27) The term ``governmental unit'' means United
States; State; Commonwealth; District; Territory;
municipality; foreign state; department, agency, or
instrumentality of the United States (but not a United
States trustee while serving as a trustee in a case
under this title), a State, a Commonwealth, a District,
a Territory, a municipality, or a foreign state; or
other foreign or domestic government.
(27A) The term ``health care business''--
(A) means any public or private entity
(without regard to whether that entity is
organized for profit or not for profit) that is
primarily engaged in offering to the general
public facilities and services for--
(i) the diagnosis or treatment of
injury, deformity, or disease; and
(ii) surgical, drug treatment,
psychiatric, or obstetric care; and
(B) includes--
(i) any--
(I) general or specialized
hospital;
(II) ancillary ambulatory,
emergency, or surgical
treatment facility;
(III) hospice;
(IV) home health agency; and
(V) other health care
institution that is similar to
an entity referred to in
subclause (I), (II), (III), or
(IV); and
(ii) any long-term care facility,
including any--
(I) skilled nursing facility;
(II) intermediate care
facility;
(III) assisted living
facility;
(IV) home for the aged;
(V) domiciliary care
facility; and
(VI) health care institution
that is related to a facility
referred to in subclause (I),
(II), (III), (IV), or (V), if
that institution is primarily
engaged in offering room,
board, laundry, or personal
assistance with activities of
daily living and incidentals to
activities of daily living.
(27B) The term ``incidental property'' means, with
respect to a debtor's principal residence--
(A) property commonly conveyed with a
principal residence in the area where the real
property is located;
(B) all easements, rights, appurtenances,
fixtures, rents, royalties, mineral rights, oil
or gas rights or profits, water rights, escrow
funds, or insurance proceeds; and
(C) all replacements or additions.
(28) The term ``indenture'' means mortgage, deed of
trust, or indenture, under which there is outstanding a
security, other than a voting-trust certificate,
constituting a claim against the debtor, a claim
secured by a lien on any of the debtor's property, or
an equity security of the debtor.
(29) The term ``indenture trustee'' means trustee
under an indenture.
(30) The term ``individual with regular income''
means individual whose income is sufficiently stable
and regular to enable such individual to make payments
under a plan under chapter 13 of this title, other than
a stockbroker or a commodity broker.
(31) The term ``insider'' includes--
(A) if the debtor is an individual--
(i) relative of the debtor or of a
general partner of the debtor;
(ii) partnership in which the debtor
is a general partner;
(iii) general partner of the debtor;
or
(iv) corporation of which the debtor
is a director, officer, or person in
control;
(B) if the debtor is a corporation--
(i) director of the debtor;
(ii) officer of the debtor;
(iii) person in control of the
debtor;
(iv) partnership in which the debtor
is a general partner;
(v) general partner of the debtor; or
(vi) relative of a general partner,
director, officer, or person in control
of the debtor;
(C) if the debtor is a partnership--
(i) general partner in the debtor;
(ii) relative of a general partner
in, general partner of, or person in
control of the debtor;
(iii) partnership in which the debtor
is a general partner;
(iv) general partner of the debtor;
or
(v) person in control of the debtor;
(D) if the debtor is a municipality, elected
official of the debtor or relative of an
elected official of the debtor;
(E) affiliate, or insider of an affiliate as
if such affiliate were the debtor; and
(F) managing agent of the debtor.
(32) The term ``insolvent'' means--
(A) with reference to an entity other than a
partnership and a municipality, financial
condition such that the sum of such entity's
debts is greater than all of such entity's
property, at a fair valuation, exclusive of--
(i) property transferred, concealed,
or removed with intent to hinder,
delay, or defraud such entity's
creditors; and
(ii) property that may be exempted
from property of the estate under
section 522 of this title;
(B) with reference to a partnership,
financial condition such that the sum of such
partnership's debts is greater than the
aggregate of, at a fair valuation--
(i) all of such partnership's
property, exclusive of property of the
kind specified in subparagraph (A)(i)
of this paragraph; and
(ii) the sum of the excess of the
value of each general partner's
nonpartnership property, exclusive of
property of the kind specified in
subparagraph (A) of this paragraph,
over such partner's nonpartnership
debts; and
(C) with reference to a municipality,
financial condition such that the municipality
is--
(i) generally not paying its debts as
they become due unless such debts are
the subject of a bona fide dispute; or
(ii) unable to pay its debts as they
become due.
(33) The term ``institution-affiliated party''--
(A) with respect to an insured depository
institution (as defined in section 3(c)(2) of
the Federal Deposit Insurance Act), has the
meaning given it in section 3(u) of the Federal
Deposit Insurance Act; and
(B) with respect to an insured credit union,
has the meaning given it in section 206(r) of
the Federal Credit Union Act.
(34) The term ``insured credit union'' has the
meaning given it in section 101(7) of the Federal
Credit Union Act.
(35) The term ``insured depository institution''--
(A) has the meaning given it in section
3(c)(2) of the Federal Deposit Insurance Act;
and
(B) includes an insured credit union (except
in the case of paragraphs (21B) and (33)(A) of
this subsection).
(35A) The term ``intellectual property'' means--
(A) trade secret;
(B) invention, process, design, or plant
protected under title 35;
(C) patent application;
(D) plant variety;
(E) work of authorship protected under title
17; or
(F) mask work protected under chapter 9 of
title 17;
to the extent protected by applicable nonbankruptcy
law.
(36) The term ``judicial lien'' means lien obtained
by judgment, levy, sequestration, or other legal or
equitable process or proceeding.
(37) The term ``lien'' means charge against or
interest in property to secure payment of a debt or
performance of an obligation.
(38) The term ``margin payment'' means, for purposes
of the forward contract provisions of this title,
payment or deposit of cash, a security or other
property, that is commonly known in the forward
contract trade as original margin, initial margin,
maintenance margin, or variation margin, including
mark-to-market payments, or variation payments.
(38A) The term ``master netting agreement''--
(A) means an agreement providing for the
exercise of rights, including rights of
netting, setoff, liquidation, termination,
acceleration, or close out, under or in
connection with one or more contracts that are
described in any one or more of paragraphs (1)
through (5) of section 561(a), or any security
agreement or arrangement or other credit
enhancement related to one or more of the
foregoing, including any guarantee or
reimbursement obligation related to 1 or more
of the foregoing; and
(B) if the agreement contains provisions
relating to agreements or transactions that are
not contracts described in paragraphs (1)
through (5) of section 561(a), shall be deemed
to be a master netting agreement only with
respect to those agreements or transactions
that are described in any one or more of
paragraphs (1) through (5) of section 561(a).
(38B) The term ``master netting agreement
participant'' means an entity that, at any time before
the date of the filing of the petition, is a party to
an outstanding master netting agreement with the
debtor.
(39) The term ``mask work'' has the meaning given it
in section 901(a)(2) of title 17.
(39A) The term ``median family income'' means for any
year--
(A) the median family income both calculated
and reported by the Bureau of the Census in the
then most recent year; and
(B) if not so calculated and reported in the
then current year, adjusted annually after such
most recent year until the next year in which
median family income is both calculated and
reported by the Bureau of the Census, to
reflect the percentage change in the Consumer
Price Index for All Urban Consumers during the
period of years occurring after such most
recent year and before such current year.
(40) The term ``municipality'' means political
subdivision or public agency or instrumentality of a
State.
(40A) The term ``patient'' means any individual who
obtains or receives services from a health care
business.
(40B) The term ``patient records'' means any record
relating to a patient, including a written document or
a record recorded in a magnetic, optical, or other form
of electronic medium.
(41) The term ``person'' includes individual,
partnership, and corporation, but does not include
governmental unit, except that a governmental unit
that--
(A) acquires an asset from a person--
(i) as a result of the operation of a
loan guarantee agreement; or
(ii) as receiver or liquidating agent
of a person;
(B) is a guarantor of a pension benefit
payable by or on behalf of the debtor or an
affiliate of the debtor; or
(C) is the legal or beneficial owner of an
asset of--
(i) an employee pension benefit plan
that is a governmental plan, as defined
in section 414(d) of the Internal
Revenue Code of 1986; or
(ii) an eligible deferred
compensation plan, as defined in
section 457(b) of the Internal Revenue
Code of 1986;
shall be considered, for purposes of section 1102 of
this title, to be a person with respect to such asset
or such benefit.
(41A) The term ``personally identifiable
information'' means--
(A) if provided by an individual to the
debtor in connection with obtaining a product
or a service from the debtor primarily for
personal, family, or household purposes--
(i) the first name (or initial) and
last name of such individual, whether
given at birth or time of adoption, or
resulting from a lawful change of name;
(ii) the geographical address of a
physical place of residence of such
individual;
(iii) an electronic address
(including an e-mail address) of such
individual;
(iv) a telephone number dedicated to
contacting such individual at such
physical place of residence;
(v) a social security account number
issued to such individual; or
(vi) the account number of a credit
card issued to such individual; or
(B) if identified in connection with 1 or
more of the items of information specified in
subparagraph (A)--
(i) a birth date, the number of a
certificate of birth or adoption, or a
place of birth; or
(ii) any other information concerning
an identified individual that, if
disclosed, will result in contacting or
identifying such individual physically
or electronically.
(42) The term ``petition'' means petition filed under
section 301, 302, 303 and 1504 of this title, as the
case may be, commencing a case under this title.
(42A) The term ``production payment'' means a term
overriding royalty satisfiable in cash or in kind--
(A) contingent on the production of a liquid
or gaseous hydrocarbon from particular real
property; and
(B) from a specified volume, or a specified
value, from the liquid or gaseous hydrocarbon
produced from such property, and determined
without regard to production costs.
(43) The term ``purchaser'' means transferee of a
voluntary transfer, and includes immediate or mediate
transferee of such a transferee.
(44) The term ``railroad'' means common carrier by
railroad engaged in the transportation of individuals
or property or owner of trackage facilities leased by
such a common carrier.
(45) The term ``relative'' means individual related
by affinity or consanguinity within the third degree as
determined by the common law, or individual in a step
or adoptive relationship within such third degree.
(46) The term ``repo participant'' means an entity
that, at any time before the filing of the petition,
has an outstanding repurchase agreement with the
debtor.
(47) The term ``repurchase agreement'' (which
definition also applies to a reverse repurchase
agreement)--
(A) means--
(i) an agreement, including related
terms, which provides for the transfer
of one or more certificates of deposit,
mortgage related securities (as defined
in section 3 of the Securities Exchange
Act of 1934), mortgage loans, interests
in mortgage related securities or
mortgage loans, eligible bankers'
acceptances, qualified foreign
government securities (defined as a
security that is a direct obligation
of, or that is fully guaranteed by, the
central government of a member of the
Organization for Economic Cooperation
and Development), or securities that
are direct obligations of, or that are
fully guaranteed by, the United States
or any agency of the United States
against the transfer of funds by the
transferee of such certificates of
deposit, eligible bankers' acceptances,
securities, mortgage loans, or
interests, with a simultaneous
agreement by such transferee to
transfer to the transferor thereof
certificates of deposit, eligible
bankers' acceptance, securities,
mortgage loans, or interests of the
kind described in this clause, at a
date certain not later than 1 year
after such transfer or on demand,
against the transfer of funds;
(ii) any combination of agreements or
transactions referred to in clauses (i)
and (iii);
(iii) an option to enter into an
agreement or transaction referred to in
clause (i) or (ii);
(iv) a master agreement that provides
for an agreement or transaction
referred to in clause (i), (ii), or
(iii), together with all supplements to
any such master agreement, without
regard to whether such master agreement
provides for an agreement or
transaction that is not a repurchase
agreement under this paragraph, except
that such master agreement shall be
considered to be a repurchase agreement
under this paragraph only with respect
to each agreement or transaction under
the master agreement that is referred
to in clause (i), (ii), or (iii); or
(v) any security agreement or
arrangement or other credit enhancement
related to any agreement or transaction
referred to in clause (i), (ii), (iii),
or (iv), including any guarantee or
reimbursement obligation by or to a
repo participant or financial
participant in connection with any
agreement or transaction referred to in
any such clause, but not to exceed the
damages in connection with any such
agreement or transaction, measured in
accordance with section 562 of this
title; and
(B) does not include a repurchase obligation
under a participation in a commercial mortgage
loan.
(48) The term ``securities clearing agency'' means
person that is registered as a clearing agency under
section 17A of the Securities Exchange Act of 1934, or
exempt from such registration under such section
pursuant to an order of the Securities and Exchange
Commission, or whose business is confined to the
performance of functions of a clearing agency with
respect to exempted securities, as defined in section
3(a)(12) of such Act for the purposes of such section
17A.
(48A) The term ``securities self regulatory
organization'' means either a securities association
registered with the Securities and Exchange Commission
under section 15A of the Securities Exchange Act of
1934 or a national securities exchange registered with
the Securities and Exchange Commission under section 6
of the Securities Exchange Act of 1934.
(49) The term ``security''--
(A) includes--
(i) note;
(ii) stock;
(iii) treasury stock;
(iv) bond;
(v) debenture;
(vi) collateral trust certificate;
(vii) pre-organization certificate or
subscription;
(viii) transferable share;
(ix) voting-trust certificate;
(x) certificate of deposit;
(xi) certificate of deposit for
security;
(xii) investment contract or
certificate of interest or
participation in a profit-sharing
agreement or in an oil, gas, or mineral
royalty or lease, if such contract or
interest is required to be the subject
of a registration statement filed with
the Securities and Exchange Commission
under the provisions of the Securities
Act of 1933, or is exempt under section
3(b) of such Act from the requirement
to file such a statement;
(xiii) interest of a limited partner
in a limited partnership;
(xiv) other claim or interest
commonly known as ``security''; and
(xv) certificate of interest or
participation in, temporary or interim
certificate for, receipt for, or
warrant or right to subscribe to or
purchase or sell, a security; but
(B) does not include--
(i) currency, check, draft, bill of
exchange, or bank letter of credit;
(ii) leverage transaction, as defined
in section 761 of this title;
(iii) commodity futures contract or
forward contract;
(iv) option, warrant, or right to
subscribe to or purchase or sell a
commodity futures contract;
(v) option to purchase or sell a
commodity;
(vi) contract or certificate of a
kind specified in subparagraph (A)(xii)
of this paragraph that is not required
to be the subject of a registration
statement filed with the Securities and
Exchange Commission and is not exempt
under section 3(b) of the Securities
Act of 1933 from the requirement to
file such a statement; or
(vii) debt or evidence of
indebtedness for goods sold and
delivered or services rendered.
(50) The term ``security agreement'' means agreement
that creates or provides for a security interest.
(51) The term ``security interest'' means lien
created by an agreement.
(51A) The term ``settlement payment'' means, for
purposes of the forward contract provisions of this
title, a preliminary settlement payment, a partial
settlement payment, an interim settlement payment, a
settlement payment on account, a final settlement
payment, a net settlement payment, or any other similar
payment commonly used in the forward contract trade.
(51B) The term ``single asset real estate'' means
real property constituting a single property or
project, other than residential real property with
fewer than 4 residential units, which generates
substantially all of the gross income of a debtor who
is not a family farmer and on which no substantial
business is being conducted by a debtor other than the
business of operating the real property and activities
incidental thereto.
(51C) The term ``small business case'' means a case
filed under chapter 11 of this title in which the
debtor is a small business debtor and has not elected
that subchapter V of chapter 11 of this title shall
apply.
(51D) The term ``small business debtor''--
(A) subject to subparagraph (B), means a
person engaged in commercial or business
activities (including any affiliate of such
person that is also a debtor under this title
and excluding a person whose primary activity
is the business of owning [or operating real
property or activities incidental thereto]
single asset real estate) that has aggregate
noncontingent liquidated secured and unsecured
debts as of the date of the filing of the
petition or the date of the order for relief in
an amount not more than $2,000,000 (excluding
debts owed to 1 or more affiliates or insiders)
[for a case in which the United States trustee
has not appointed under section 1102(a)(1) a
committee of unsecured creditors or where the
court has determined that the committee of
unsecured creditors is not sufficiently active
and representative to provide effective
oversight of the debtor; and] not less than 50
percent of which arose from the commercial or
business activities of the debtor; and
(B) [does not include any member] does not
include--
(i) any member of a group of
affiliated debtors that has aggregate
noncontingent liquidated secured and
unsecured debts in an amount greater
than $2,000,000 (excluding debt owed to
1 or more affiliates or insiders)[.];
(ii) any debtor that is a corporation
subject to the reporting requirements
under section 13 or 15(d) of the
Securities Exchange Act of 1934 (15
U.S.C. 78m, 78o(d)); or
(iii) any corporation that--
(I) is subject to the
reporting requirements under
section 13 or 15(d) of the
Securities Exchange Act of 1934
(15 U.S.C. 78m, 78o(d)); and
(II) is an affiliate of a
debtor.
(52) The term ``State'' includes the District of
Columbia and Puerto Rico, except for the purpose of
defining who may be a debtor under chapter 9 of this
title.
(53) The term ``statutory lien'' means lien arising
solely by force of a statute on specified circumstances
or conditions, or lien of distress for rent, whether or
not statutory, but does not include security interest
or judicial lien, whether or not such interest or lien
is provided by or is dependent on a statute and whether
or not such interest or lien is made fully effective by
statute.
(53A) The term ``stockbroker'' means person--
(A) with respect to which there is a
customer, as defined in section 741 of this
title; and
(B) that is engaged in the business of
effecting transactions in securities--
(i) for the account of others; or
(ii) with members of the general
public, from or for such person's own
account.
(53B) The term ``swap agreement''--
(A) means--
(i) any agreement, including the
terms and conditions incorporated by
reference in such agreement, which is--
(I) an interest rate swap,
option, future, or forward
agreement, including a rate
floor, rate cap, rate collar,
cross-currency rate swap, and
basis swap;
(II) a spot, same day-
tomorrow, tomorrow-next,
forward, or other foreign
exchange, precious metals, or
other commodity agreement;
(III) a currency swap,
option, future, or forward
agreement;
(IV) an equity index or
equity swap, option, future, or
forward agreement;
(V) a debt index or debt
swap, option, future, or
forward agreement;
(VI) a total return, credit
spread or credit swap, option,
future, or forward agreement;
(VII) a commodity index or a
commodity swap, option, future,
or forward agreement;
(VIII) a weather swap,
option, future, or forward
agreement;
(IX) an emissions swap,
option, future, or forward
agreement; or
(X) an inflation swap,
option, future, or forward
agreement;
(ii) any agreement or transaction
that is similar to any other agreement
or transaction referred to in this
paragraph and that--
(I) is of a type that has
been, is presently, or in the
future becomes, the subject of
recurrent dealings in the swap
or other derivatives markets
(including terms and conditions
incorporated by reference
therein); and
(II) is a forward, swap,
future, option, or spot
transaction on one or more
rates, currencies, commodities,
equity securities, or other
equity instruments, debt
securities or other debt
instruments, quantitative
measures associated with an
occurrence, extent of an
occurrence, or contingency
associated with a financial,
commercial, or economic
consequence, or economic or
financial indices or measures
of economic or financial risk
or value;
(iii) any combination of agreements
or transactions referred to in this
subparagraph;
(iv) any option to enter into an
agreement or transaction referred to in
this subparagraph;
(v) a master agreement that provides
for an agreement or transaction
referred to in clause (i), (ii), (iii),
or (iv), together with all supplements
to any such master agreement, and
without regard to whether the master
agreement contains an agreement or
transaction that is not a swap
agreement under this paragraph, except
that the master agreement shall be
considered to be a swap agreement under
this paragraph only with respect to
each agreement or transaction under the
master agreement that is referred to in
clause (i), (ii), (iii), or (iv); or
(vi) any security agreement or
arrangement or other credit enhancement
related to any agreements or
transactions referred to in clause (i)
through (v), including any guarantee or
reimbursement obligation by or to a
swap participant or financial
participant in connection with any
agreement or transaction referred to in
any such clause, but not to exceed the
damages in connection with any such
agreement or transaction, measured in
accordance with section 562; and
(B) is applicable for purposes of this title
only, and shall not be construed or applied so
as to challenge or affect the characterization,
definition, or treatment of any swap agreement
under any other statute, regulation, or rule,
including the Gramm-Leach-Bliley Act, the Legal
Certainty for Bank Products Act of 2000, the
securities laws (as such term is defined in
section 3(a)(47) of the Securities Exchange Act
of 1934) and the Commodity Exchange Act.
(53C) The term ``swap participant'' means an entity
that, at any time before the filing of the petition,
has an outstanding swap agreement with the debtor.
(56A) The term ``term overriding royalty'' means an
interest in liquid or gaseous hydrocarbons in place or
to be produced from particular real property that
entitles the owner thereof to a share of production, or
the value thereof, for a term limited by time,
quantity, or value realized.
(53D) The term ``timeshare plan'' means and shall
include that interest purchased in any arrangement,
plan, scheme, or similar device, but not including
exchange programs, whether by membership, agreement,
tenancy in common, sale, lease, deed, rental agreement,
license, right to use agreement, or by any other means,
whereby a purchaser, in exchange for consideration,
receives a right to use accommodations, facilities, or
recreational sites, whether improved or unimproved, for
a specific period of time less than a full year during
any given year, but not necessarily for consecutive
years, and which extends for a period of more than
three years. A ``timeshare interest'' is that interest
purchased in a timeshare plan which grants the
purchaser the right to use and occupy accommodations,
facilities, or recreational sites, whether improved or
unimproved, pursuant to a timeshare plan.
(54) The term ``transfer'' means--
(A) the creation of a lien;
(B) the retention of title as a security
interest;
(C) the foreclosure of a debtor's equity of
redemption; or
(D) each mode, direct or indirect, absolute
or conditional, voluntary or involuntary, of
disposing of or parting with--
(i) property; or
(ii) an interest in property.
(54A) The term ``uninsured State member bank'' means
a State member bank (as defined in section 3 of the
Federal Deposit Insurance Act) the deposits of which
are not insured by the Federal Deposit Insurance
Corporation.
(55) The term ``United States'', when used in a
geographical sense, includes all locations where the
judicial jurisdiction of the United States extends,
including territories and possessions of the United
States.
* * * * * * *
Sec. 103. Applicability of chapters
(a) Except as provided in section 1161 of this title,
chapters 1, 3, and 5 of this title apply in a case under
chapter 7, 11, 12, or 13 of this title, and this chapter,
sections 307, 362(o), 555 through 557, and 559 through 562
apply in a case under chapter 15.
(b) Subchapters I and II of chapter 7 of this title apply
only in a case under such chapter.
(c) Subchapter III of chapter 7 of this title applies only in
a case under such chapter concerning a stockbroker.
(d) Subchapter IV of chapter 7 of this title applies only in
a case under such chapter concerning a commodity broker.
(e) Scope of Application.--Subchapter V of chapter 7 of this
title shall apply only in a case under such chapter concerning
the liquidation of an uninsured State member bank, or a
corporation organized under section 25A of the Federal Reserve
Act, which operates, or operates as, a multilateral clearing
organization pursuant to section 409 of the Federal Deposit
Insurance Corporation Improvement Act of 1991.
(f) Except as provided in section 901 of this title, only
chapters 1 and 9 of this title apply in a case under such
chapter 9.
(g) Except as provided in section 901 of this title,
subchapters I, II, and III of chapter 11 of this title apply
only in a case under such chapter.
(h) Subchapter IV of chapter 11 of this title applies only in
a case under such chapter concerning a railroad.
(i) Subchapter V of chapter 11 of this title applies only in
a case under chapter 11 in which a small business debtor elects
that subchapter V of chapter 11 shall apply.
[(i)] (j) Chapter 13 of this title applies only in a case
under such chapter.
[(j)] (k) Chapter 12 of this title applies only in a case
under such chapter.
[(k)] (l) Chapter 15 applies only in a case under such
chapter, except that--
(1) sections 1505, 1513, and 1514 apply in all cases
under this title; and
(2) section 1509 applies whether or not a case under
this title is pending.
* * * * * * *
CHAPTER 3--CASE ADMINISTRATION
* * * * * * *
SUBCHAPTER II--OFFICERS
* * * * * * *
Sec. 322. Qualification of trustee
(a) Except as provided in subsection (b)(1), a person
selected under section 701, 702, 703, 1104, 1163, 1183, 1202,
or 1302 of this title to serve as trustee in a case under this
title qualifies if before seven 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.
* * * * * * *
Sec. 326. Limitation on compensation of trustee
(a) In a case under chapter 7 or 11, other than a case under
subchapter V of chapter 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 subchapter V of chapter 11 or 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.
* * * * * * *
SUBCHAPTER III--ADMINISTRATION
* * * * * * *
Sec. 347. Unclaimed property
(a) Ninety days after the final distribution under section
726, 1194, 1226, or 1326 of this title in a case under chapter
7, subchapter V of chapter 11, 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, 1194, 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.
* * * * * * *
SUBCHAPTER IV--ADMINISTRATIVE POWERS
* * * * * * *
Sec. 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, 1183, 1184, 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--
(1) in the case of a debtor that is a corporation or
trust that is not a moneyed business, commercial
corporation, or trust, only in accordance with
nonbankruptcy law applicable to the transfer of
property by a debtor that is such a corporation or
trust; and
(2) only 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, the 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.
Sec. 364. Obtaining credit
(a) If the trustee is authorized to operate the business of
the debtor under section 721, 1108, 1183, 1184, 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.
* * * * * * *
CHAPTER 5--CREDITORS, THE DEBTOR, AND THE ESTATE
* * * * * * *
SUBCHAPTER II--DEBTOR'S DUTIES AND BENEFITS
* * * * * * *
Sec. 523. Exceptions to discharge
(a) A discharge under section 727, 1141, 1192, 1228(a),
1228(b), or 1328(b) of this title does not discharge an
individual debtor from any debt--
(1) for a tax or a customs duty--
(A) of the kind and for the periods specified
in section 507(a)(3) or 507(a)(8) of this
title, whether or not a claim for such tax was
filed or allowed;
(B) with respect to which a return, or
equivalent report or notice, if required--
(i) was not filed or given; or
(ii) was filed or given after the
date on which such return, report, or
notice was last due, under applicable
law or under any extension, and after
two years before the date of the filing
of the petition; or
(C) with respect to which the debtor made a
fraudulent return or willfully attempted in any
manner to evade or defeat such tax;
(2) for money, property, services, or an extension,
renewal, or refinancing of credit, to the extent
obtained by--
(A) false pretenses, a false representation,
or actual fraud, other than a statement
respecting the debtor's or an insider's
financial condition;
(B) use of a statement in writing--
(i) that is materially false;
(ii) respecting the debtor's or an
insider's financial condition;
(iii) on which the creditor to whom
the debtor is liable for such money,
property, services, or credit
reasonably relied; and
(iv) that the debtor caused to be
made or published with intent to
deceive; or
(C)(i) for purposes of subparagraph (A)--
(I) consumer debts owed to a
single creditor and aggregating
more than $500 for luxury goods
or services incurred by an
individual debtor on or within
90 days before the order for
relief under this title are
presumed to be
nondischargeable; and
(II) cash advances
aggregating more than $750 that
are extensions of consumer
credit under an open end credit
plan obtained by an individual
debtor on or within 70 days
before the order for relief
under this title, are presumed
to be nondischargeable; and
(ii) for purposes of this
subparagraph--
(I) the terms ``consumer'',
``credit'', and ``open end credit
plan'' have the same meanings as in
section 103 of the Truth in Lending
Act; and
(II) the term ``luxury goods or
services'' does not include goods or
services reasonably necessary for the
support or maintenance of the debtor or
a dependent of the debtor;
(3) neither listed nor scheduled under section
521(a)(1) of this title, with the name, if known to the
debtor, of the creditor to whom such debt is owed, in
time to permit--
(A) if such debt is not of a kind specified
in paragraph (2), (4), or (6) of this
subsection, timely filing of a proof of claim,
unless such creditor had notice or actual
knowledge of the case in time for such timely
filing; or
(B) if such debt is of a kind specified in
paragraph (2), (4), or (6) of this subsection,
timely filing of a proof of claim and timely
request for a determination of dischargeability
of such debt under one of such paragraphs,
unless such creditor had notice or actual
knowledge of the case in time for such timely
filing and request;
(4) for fraud or defalcation while acting in a
fiduciary capacity, embezzlement, or larceny;
(5) for a domestic support obligation;
(6) for willful and malicious injury by the debtor to
another entity or to the property of another entity;
(7) to the extent such debt is for a fine, penalty,
or forfeiture payable to and for the benefit of a
governmental unit, and is not compensation for actual
pecuniary loss, other than a tax penalty--
(A) relating to a tax of a kind not specified
in paragraph (1) of this subsection; or
(B) imposed with respect to a transaction or
event that occurred before three years before
the date of the filing of the petition;
(8) unless excepting such debt from discharge under
this paragraph would impose an undue hardship on the
debtor and the debtor's dependents, for--
(A)(i) an educational benefit overpayment or
loan made, insured, or guaranteed by a
governmental unit, or made under any program
funded in whole or in part by a governmental
unit or nonprofit institution; or
(ii) an obligation to repay funds
received as an educational benefit,
scholarship, or stipend; or
(B) any other educational loan that is a
qualified education loan, as defined in section
221(d)(1) of the Internal Revenue Code of 1986,
incurred by a debtor who is an individual;
(9) for death or personal injury caused by the
debtor's operation of a motor vehicle, vessel, or
aircraft if such operation was unlawful because the
debtor was intoxicated from using alcohol, a drug, or
another substance;
(10) that was or could have been listed or scheduled
by the debtor in a prior case concerning the debtor
under this title or under the Bankruptcy Act in which
the debtor waived discharge, or was denied a discharge
under section 727(a)(2), (3), (4), (5), (6), or (7) of
this title, or under section 14c(1), (2), (3), (4),
(6), or (7) of such Act;
(11) provided in any final judgment, unreviewable
order, or consent order or decree entered in any court
of the United States or of any State, issued by a
Federal depository institutions regulatory agency, or
contained in any settlement agreement entered into by
the debtor, arising from any act of fraud or
defalcation while acting in a fiduciary capacity
committed with respect to any depository institution or
insured credit union;
(12) for malicious or reckless failure to fulfill any
commitment by the debtor to a Federal depository
institutions regulatory agency to maintain the capital
of an insured depository institution, except that this
paragraph shall not extend any such commitment which
would otherwise be terminated due to any act of such
agency;
(13) for any payment of an order of restitution
issued under title 18, United States Code;
(14) incurred to pay a tax to the United States that
would be nondischargeable pursuant to paragraph (1);
(14A) incurred to pay a tax to a governmental unit,
other than the United States, that would be
nondischargeable under paragraph (1);
(14B) incurred to pay fines or penalties imposed
under Federal election law;
(15) to a spouse, former spouse, or child of the
debtor and not of the kind described in paragraph (5)
that is incurred by the debtor in the course of a
divorce or separation or in connection with a
separation agreement, divorce decree or other order of
a court of record, or a determination made in
accordance with State or territorial law by a
governmental unit;
(16) for a fee or assessment that becomes due and
payable after the order for relief to a membership
association with respect to the debtor's interest in a
unit that has condominium ownership, in a share of a
cooperative corporation, or a lot in a homeowners
association, for as long as the debtor or the trustee
has a legal, equitable, or possessory ownership
interest in such unit, such corporation, or such lot,
but nothing in this paragraph shall except from
discharge the debt of a debtor for a membership
association fee or assessment for a period arising
before entry of the order for relief in a pending or
subsequent bankruptcy case;
(17) for a fee imposed on a prisoner by any court for
the filing of a case, motion, complaint, or appeal, or
for other costs and expenses assessed with respect to
such filing, regardless of an assertion of poverty by
the debtor under subsection (b) or (f)(2) of section
1915 of title 28 (or a similar non-Federal law), or the
debtor's status as a prisoner, as defined in section
1915(h) of title 28 (or a similar non-Federal law);
(18) owed to 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, under--
(A) a loan permitted under section 408(b)(1)
of the Employee Retirement Income Security Act
of 1974, or 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; or
(19) that--
(A) is for--
(i) the violation of any of the
Federal securities laws (as that term
is defined in section 3(a)(47) of the
Securities Exchange Act of 1934), any
of the State securities laws, or any
regulation or order issued under such
Federal or State securities laws; or
(ii) common law fraud, deceit, or
manipulation in connection with the
purchase or sale of any security; and
(B) results, before, on, or after the date on
which the petition was filed, from--
(i) any judgment, order, consent
order, or decree entered in any Federal
or State judicial or administrative
proceeding;
(ii) any settlement agreement entered
into by the debtor; or
(iii) any court or administrative
order for any damages, fine, penalty,
citation, restitutionary payment,
disgorgement payment, attorney fee,
cost, or other payment owed by the
debtor.
For purposes of this subsection, the term ``return'' means a
return that satisfies the requirements of applicable
nonbankruptcy law (including applicable filing requirements).
Such term includes a return prepared pursuant to section
6020(a) of the Internal Revenue Code of 1986, or similar State
or local law, or a written stipulation to a judgment or a final
order entered by a nonbankruptcy tribunal, but does not include
a return made pursuant to section 6020(b) of the Internal
Revenue Code of 1986, or a similar State or local law.
(b) Notwithstanding subsection (a) of this section, a debt
that was excepted from discharge under subsection (a)(1),
(a)(3), or (a)(8) of this section, under section 17a(1),
17a(3), or 17a(5) of the Bankruptcy Act, under section 439A of
the Higher Education Act of 1965, or under section 733(g) of
the Public Health Service Act in a prior case concerning the
debtor under this title, or under the Bankruptcy Act, is
dischargeable in a case under this title unless, by the terms
of subsection (a) of this section, such debt is not
dischargeable in the case under this title.
(c)(1) Except as provided in subsection (a)(3)(B) of this
section, the debtor shall be discharged from a debt of a kind
specified in paragraph (2), (4), or (6) of subsection (a) of
this section, unless, on request of the creditor to whom such
debt is owed, and after notice and a hearing, the court
determines such debt to be excepted from discharge under
paragraph (2), (4), or (6), as the case may be, of subsection
(a) of this section.
(2) Paragraph (1) shall not apply in the case of a
Federal depository institutions regulatory agency
seeking, in its capacity as conservator, receiver, or
liquidating agent for an insured depository
institution, to recover a debt described in subsection
(a)(2), (a)(4), (a)(6), or (a)(11) owed to such
institution by an institution-affiliated party unless
the receiver, conservator, or liquidating agent was
appointed in time to reasonably comply, or for a
Federal depository institutions regulatory agency
acting in its corporate capacity as a successor to such
receiver, conservator, or liquidating agent to
reasonably comply, with subsection (a)(3)(B) as a
creditor of such institution-affiliated party with
respect to such debt.
(d) If a creditor requests a determination of
dischargeability of a consumer debt under subsection (a)(2) of
this section, and such debt is discharged, the court shall
grant judgment in favor of the debtor for the costs of, and a
reasonable attorney's fee for, the proceeding if the court
finds that the position of the creditor was not substantially
justified, except that the court shall not award such costs and
fees if special circumstances would make the award unjust.
(e) Any institution-affiliated party of an insured depository
institution shall be considered to be acting in a fiduciary
capacity with respect to the purposes of subsection (a)(4) or
(11).
Sec. 524. Effect of discharge
(a) A discharge in a case under this title--
(1) voids any judgment at any time obtained, to the
extent that such judgment is a determination of the
personal liability of the debtor with respect to any
debt discharged under section 727, 944, 1141, 1192,
1228, or 1328 of this title, whether or not discharge
of such debt is waived;
(2) operates as an injunction against the
commencement or continuation of an action, the
employment of process, or an act, to collect, recover
or offset any such debt as a personal liability of the
debtor, whether or not discharge of such debt is
waived; and
(3) operates as an injunction against the
commencement or continuation of an action, the
employment of process, or an act, to collect or recover
from, or offset against, property of the debtor of the
kind specified in section 541(a)(2) of this title that
is acquired after the commencement of the case, on
account of any allowable community claim, except a
community claim that is excepted from discharge under
section 523, 1192, 1228(a)(1), or 1328(a)(1), or that
would be so excepted, determined in accordance with the
provisions of sections 523(c) and 523(d) of this title,
in a case concerning the debtor's spouse commenced on
the date of the filing of the petition in the case
concerning the debtor, whether or not discharge of the
debt based on such community claim is waived.
(b) Subsection (a)(3) of this section does not apply if--
(1)(A) the debtor's spouse is a debtor in a case
under this title, or a bankrupt or a debtor in a case
under the Bankruptcy Act, commenced within six years of
the date of the filing of the petition in the case
concerning the debtor; and
(B) the court does not grant the debtor's
spouse a discharge in such case concerning the
debtor's spouse; or
(2)(A) the court would not grant the debtor's spouse
a discharge in a case under chapter 7 of this title
concerning such spouse commenced on the date of the
filing of the petition in the case concerning the
debtor; and
(B) a determination that the court would not
so grant such discharge is made by the
bankruptcy court within the time and in the
manner provided for a determination under
section 727 of this title of whether a debtor
is granted a discharge.
(c) An agreement between a holder of a claim and the debtor,
the consideration for which, in whole or in part, is based on a
debt that is dischargeable in a case under this title is
enforceable only to any extent enforceable under applicable
nonbankruptcy law, whether or not discharge of such debt is
waived, only if--
(1) such agreement was made before the granting of
the discharge under section 727, 1141, 1192, 1228, or
1328 of this title;
(2) the debtor received the disclosures described in
subsection (k) at or before the time at which the
debtor signed the agreement;
(3) such agreement has been filed with the court and,
if applicable, accompanied by a declaration or an
affidavit of the attorney that represented the debtor
during the course of negotiating an agreement under
this subsection, which states that--
(A) such agreement represents a fully
informed and voluntary agreement by the debtor;
(B) such agreement does not impose an undue
hardship on the debtor or a dependent of the
debtor; and
(C) the attorney fully advised the debtor of
the legal effect and consequences of--
(i) an agreement of the kind
specified in this subsection; and
(ii) any default under such an
agreement;
(4) the debtor has not rescinded such agreement at
any time prior to discharge or within sixty days after
such agreement is filed with the court, whichever
occurs later, by giving notice of rescission to the
holder of such claim;
(5) the provisions of subsection (d) of this section
have been complied with; and
(6)(A) in a case concerning an individual who was not
represented by an attorney during the course of
negotiating an agreement under this subsection, the
court approves such agreement as--
(i) not imposing an undue hardship on
the debtor or a dependent of the
debtor; and
(ii) in the best interest of the
debtor.
(B) Subparagraph (A) shall not apply to the
extent that such debt is a consumer debt
secured by real property.
(d) In a case concerning an individual, when the court has
determined whether to grant or not to grant a discharge under
section 727, 1141, 1192, 1228, or 1328 of this title, the court
may hold a hearing at which the debtor shall appear in person.
At any such hearing, the court shall inform the debtor that a
discharge has been granted or the reason why a discharge has
not been granted. If a discharge has been granted and if the
debtor desires to make an agreement of the kind specified in
subsection (c) of this section and was not represented by an
attorney during the course of negotiating such agreement, then
the court shall hold a hearing at which the debtor shall appear
in person and at such hearing the court shall--
(1) inform the debtor--
(A) that such an agreement is not required
under this title, under nonbankruptcy law, or
under any agreement not made in accordance with
the provisions of subsection (c) of this
section; and
(B) of the legal effect and consequences of--
(i) an agreement of the kind
specified in subsection (c) of this
section; and
(ii) a default under such an
agreement; and
(2) determine whether the agreement that the debtor
desires to make complies with the requirements of
subsection (c)(6) of this section, if the consideration
for such agreement is based in whole or in part on a
consumer debt that is not secured by real property of
the debtor.
(e) Except as provided in subsection (a)(3) of this section,
discharge of a debt of the debtor does not affect the liability
of any other entity on, or the property of any other entity
for, such debt.
(f) Nothing contained in subsection (c) or (d) of this
section prevents a debtor from voluntarily repaying any debt.
(g)(1)(A) After notice and hearing, a court that enters an
order confirming a plan of reorganization under chapter 11 may
issue, in connection with such order, an injunction in
accordance with this subsection to supplement the injunctive
effect of a discharge under this section.
(B) An injunction may be issued under
subparagraph (A) to enjoin entities from taking
legal action for the purpose of directly or
indirectly collecting, recovering, or receiving
payment or recovery with respect to any claim
or demand that, under a plan of reorganization,
is to be paid in whole or in part by a trust
described in paragraph (2)(B)(i), except such
legal actions as are expressly allowed by the
injunction, the confirmation order, or the plan
of reorganization.
(2)(A) Subject to subsection (h), if the requirements
of subparagraph (B) are met at the time an injunction
described in paragraph (1) is entered, then after entry
of such injunction, any proceeding that involves the
validity, application, construction, or modification of
such injunction, or of this subsection with respect to
such injunction, may be commenced only in the district
court in which such injunction was entered, and such
court shall have exclusive jurisdiction over any such
proceeding without regard to the amount in controversy.
(B) The requirements of this subparagraph are that--
(i) the injunction is to be implemented in connection
with a trust that, pursuant to the plan of
reorganization--
(I) is to assume the liabilities of a debtor
which at the time of entry of the order for
relief has been named as a defendant in
personal injury, wrongful death, or property-
damage actions seeking recovery for damages
allegedly caused by the presence of, or
exposure to, asbestos or asbestos-containing
products;
(II) is to be funded in whole or in part by
the securities of 1 or more debtors involved in
such plan and by the obligation of such debtor
or debtors to make future payments, including
dividends;
(III) is to own, or by the exercise of rights
granted under such plan would be entitled to
own if specified contingencies occur, a
majority of the voting shares of--
(aa) each such debtor;
(bb) the parent corporation of each
such debtor; or
(cc) a subsidiary of each such debtor
that is also a debtor; and
(IV) is to use its assets or income to pay
claims and demands; and
(ii) subject to subsection (h), the court determines
that--
(I) the debtor is likely to be subject to
substantial future demands for payment arising
out of the same or similar conduct or events
that gave rise to the claims that are addressed
by the injunction;
(II) the actual amounts, numbers, and timing
of such future demands cannot be determined;
(III) pursuit of such demands outside the
procedures prescribed by such plan is likely to
threaten the plan's purpose to deal equitably
with claims and future demands;
(IV) as part of the process of seeking
confirmation of such plan--
(aa) the terms of the injunction
proposed to be issued under paragraph
(1)(A), including any provisions
barring actions against third parties
pursuant to paragraph (4)(A), are set
out in such plan and in any disclosure
statement supporting the plan; and
(bb) a separate class or classes of
the claimants whose claims are to be
addressed by a trust described in
clause (i) is established and votes, by
at least 75 percent of those voting, in
favor of the plan; and
(V) subject to subsection (h), pursuant to
court orders or otherwise, the trust will
operate through mechanisms such as structured,
periodic, or supplemental payments, pro rata
distributions, matrices, or periodic review of
estimates of the numbers and values of present
claims and future demands, or other comparable
mechanisms, that provide reasonable assurance
that the trust will value, and be in a
financial position to pay, present claims and
future demands that involve similar claims in
substantially the same manner.
(3)(A) If the requirements of paragraph (2)(B) are
met and the order confirming the plan of reorganization
was issued or affirmed by the district court that has
jurisdiction over the reorganization case, then after
the time for appeal of the order that issues or affirms
the plan--
(i) the injunction shall be valid and enforceable and
may not be revoked or modified by any court except
through appeal in accordance with paragraph (6);
(ii) no entity that pursuant to such plan or
thereafter becomes a direct or indirect transferee of,
or successor to any assets of, a debtor or trust that
is the subject of the injunction shall be liable with
respect to any claim or demand made against such entity
by reason of its becoming such a transferee or
successor; and
(iii) no entity that pursuant to such plan or
thereafter makes a loan to such a debtor or trust or to
such a successor or transferee shall, by reason of
making the loan, be liable with respect to any claim or
demand made against such entity, nor shall any pledge
of assets made in connection with such a loan be upset
or impaired for that reason;
(B) Subparagraph (A) shall not be construed to--
(i) imply that an entity described in subparagraph
(A)(ii) or (iii) would, if this paragraph were not
applicable, necessarily be liable to any entity by
reason of any of the acts described in subparagraph
(A);
(ii) relieve any such entity of the duty to comply
with, or of liability under, any Federal or State law
regarding the making of a fraudulent conveyance in a
transaction described in subparagraph (A)(ii) or (iii);
or
(iii) relieve a debtor of the debtor's obligation to
comply with the terms of the plan of reorganization, or
affect the power of the court to exercise its authority
under sections 1141 and 1142 to compel the debtor to do
so.
(4)(A)(i) Subject to subparagraph (B), an injunction
described in paragraph (1) shall be valid and
enforceable against all entities that it addresses.
(ii) Notwithstanding the provisions of section 524(e), such
an injunction may bar any action directed against a third party
who is identifiable from the terms of such injunction (by name
or as part of an identifiable group) and is alleged to be
directly or indirectly liable for the conduct of, claims
against, or demands on the debtor to the extent such alleged
liability of such third party arises by reason of--
(I) the third party's ownership of a financial
interest in the debtor, a past or present affiliate of
the debtor, or a predecessor in interest of the debtor;
(II) the third party's involvement in the management
of the debtor or a predecessor in interest of the
debtor, or service as an officer, director or employee
of the debtor or a related party;
(III) the third party's provision of insurance to the
debtor or a related party; or
(IV) the third party's involvement in a transaction
changing the corporate structure, or in a loan or other
financial transaction affecting the financial
condition, of the debtor or a related party, including
but not limited to--
(aa) involvement in providing financing (debt
or equity), or advice to an entity involved in
such a transaction; or
(bb) acquiring or selling a financial
interest in an entity as part of such a
transaction.
(iii) As used in this subparagraph, the term ``related
party'' means--
(I) a past or present affiliate of the debtor;
(II) a predecessor in interest of the debtor; or
(III) any entity that owned a financial interest in--
(aa) the debtor;
(bb) a past or present affiliate of the
debtor; or
(cc) a predecessor in interest of the debtor.
(B) Subject to subsection (h), if, under a plan of
reorganization, a kind of demand described in such plan is to
be paid in whole or in part by a trust described in paragraph
(2)(B)(i) in connection with which an injunction described in
paragraph (1) is to be implemented, then such injunction shall
be valid and enforceable with respect to a demand of such kind
made, after such plan is confirmed, against the debtor or
debtors involved, or against a third party described in
subparagraph (A)(ii), if--
(i) as part of the proceedings leading to issuance of
such injunction, the court appoints a legal
representative for the purpose of protecting the rights
of persons that might subsequently assert demands of
such kind, and
(ii) the court determines, before entering the order
confirming such plan, that identifying such debtor or
debtors, or such third party (by name or as part of an
identifiable group), in such injunction with respect to
such demands for purposes of this subparagraph is fair
and equitable with respect to the persons that might
subsequently assert such demands, in light of the
benefits provided, or to be provided, to such trust on
behalf of such debtor or debtors or such third party.
(5) In this subsection, the term ``demand'' means a
demand for payment, present or future, that--
(A) was not a claim during the proceedings leading to
the confirmation of a plan of reorganization;
(B) arises out of the same or similar conduct or
events that gave rise to the claims addressed by the
injunction issued under paragraph (1); and
(C) pursuant to the plan, is to be paid by a trust
described in paragraph (2)(B)(i).
(6) Paragraph (3)(A)(i) does not bar an action taken
by or at the direction of an appellate court on appeal
of an injunction issued under paragraph (1) or of the
order of confirmation that relates to the injunction.
(7) This subsection does not affect the operation of
section 1144 or the power of the district court to
refer a proceeding under section 157 of title 28 or any
reference of a proceeding made prior to the date of the
enactment of this subsection.
(h) Application to Existing Injunctions.--For purposes of
subsection (g)--
(1) subject to paragraph (2), if an injunction of the
kind described in subsection (g)(1)(B) was issued
before the date of the enactment of this Act, as part
of a plan of reorganization confirmed by an order
entered before such date, then the injunction shall be
considered to meet the requirements of subsection
(g)(2)(B) for purposes of subsection (g)(2)(A), and to
satisfy subsection (g)(4)(A)(ii), if--
(A) the court determined at the time the plan
was confirmed that the plan was fair and
equitable in accordance with the requirements
of section 1129(b);
(B) as part of the proceedings leading to
issuance of such injunction and confirmation of
such plan, the court had appointed a legal
representative for the purpose of protecting
the rights of persons that might subsequently
assert demands described in subsection
(g)(4)(B) with respect to such plan; and
(C) such legal representative did not object
to confirmation of such plan or issuance of
such injunction; and
(2) for purposes of paragraph (1), if a trust
described in subsection (g)(2)(B)(i) is subject to a
court order on the date of the enactment of this Act
staying such trust from settling or paying further
claims--
(A) the requirements of subsection
(g)(2)(B)(ii)(V) shall not apply with respect
to such trust until such stay is lifted or
dissolved; and
(B) if such trust meets such requirements on
the date such stay is lifted or dissolved, such
trust shall be considered to have met such
requirements continuously from the date of the
enactment of this Act.
(i) The willful failure of a creditor to credit payments
received under a plan confirmed under this title, unless the
order confirming the plan is revoked, the plan is in default,
or the creditor has not received payments required to be made
under the plan in the manner required by the plan (including
crediting the amounts required under the plan), shall
constitute a violation of an injunction under subsection (a)(2)
if the act of the creditor to collect and failure to credit
payments in the manner required by the plan caused material
injury to the debtor.
(j) Subsection (a)(2) does not operate as an injunction
against an act by a creditor that is the holder of a secured
claim, if--
(1) such creditor retains a security interest in real
property that is the principal residence of the debtor;
(2) such act is in the ordinary course of business
between the creditor and the debtor; and
(3) such act is limited to seeking or obtaining
periodic payments associated with a valid security
interest in lieu of pursuit of in rem relief to enforce
the lien.
(k)(1) The disclosures required under subsection (c)(2) shall
consist of the disclosure statement described in paragraph (3),
completed as required in that paragraph, together with the
agreement specified in subsection (c), statement, declaration,
motion and order described, respectively, in paragraphs (4)
through (8), and shall be the only disclosures required in
connection with entering into such agreement.
(2) Disclosures made under paragraph (1) shall be
made clearly and conspicuously and in writing. The
terms ``Amount Reaffirmed'' and ``Annual Percentage
Rate'' shall be disclosed more conspicuously than other
terms, data or information provided in connection with
this disclosure, except that the phrases ``Before
agreeing to reaffirm a debt, review these important
disclosures'' and ``Summary of Reaffirmation
Agreement'' may be equally conspicuous. Disclosures may
be made in a different order and may use terminology
different from that set forth in paragraphs (2) through
(8), except that the terms ``Amount Reaffirmed'' and
``Annual Percentage Rate'' must be used where
indicated.
(3) The disclosure statement required under this
paragraph shall consist of the following:
(A) The statement: ``Part A: Before agreeing to
reaffirm a debt, review these important disclosures:'';
(B) Under the heading ``Summary of Reaffirmation
Agreement'', the statement: ``This Summary is made
pursuant to the requirements of the Bankruptcy Code'';
(C) The ``Amount Reaffirmed'', using that term, which
shall be--
(i) the total amount of debt that the debtor
agrees to reaffirm by entering into an
agreement of the kind specified in subsection
(c), and
(ii) the total of any fees and costs accrued
as of the date of the disclosure statement,
related to such total amount.
(D) In conjunction with the disclosure of the
``Amount Reaffirmed'', the statements--
(i) ``The amount of debt you have agreed to
reaffirm''; and
(ii) ``Your credit agreement may obligate you
to pay additional amounts which may come due
after the date of this disclosure. Consult your
credit agreement.''.
(E) The ``Annual Percentage Rate'', using that term,
which shall be disclosed as--
(i) if, at the time the petition is filed,
the debt is an extension of credit under an
open end credit plan, as the terms ``credit''
and ``open end credit plan'' are defined in
section 103 of the Truth in Lending Act, then--
(I) the annual percentage rate
determined under paragraphs (5) and (6)
of section 127(b) of the Truth in
Lending Act, as applicable, as
disclosed to the debtor in the most
recent periodic statement prior to
entering into an agreement of the kind
specified in subsection (c) or, if no
such periodic statement has been given
to the debtor during the prior 6
months, the annual percentage rate as
it would have been so disclosed at the
time the disclosure statement is given
to the debtor, or to the extent this
annual percentage rate is not readily
available or not applicable, then
(II) the simple interest rate
applicable to the amount reaffirmed as
of the date the disclosure statement is
given to the debtor, or if different
simple interest rates apply to
different balances, the simple interest
rate applicable to each such balance,
identifying the amount of each such
balance included in the amount
reaffirmed, or
(III) if the entity making the
disclosure elects, to disclose the
annual percentage rate under subclause
(I) and the simple interest rate under
subclause (II); or
(ii) if, at the time the petition is filed,
the debt is an extension of credit other than
under an open end credit plan, as the terms
``credit'' and ``open end credit plan'' are
defined in section 103 of the Truth in Lending
Act, then--
(I) the annual percentage rate under
section 128(a)(4) of the Truth in
Lending Act, as disclosed to the debtor
in the most recent disclosure statement
given to the debtor prior to the
entering into an agreement of the kind
specified in subsection (c) with
respect to the debt, or, if no such
disclosure statement was given to the
debtor, the annual percentage rate as
it would have been so disclosed at the
time the disclosure statement is given
to the debtor, or to the extent this
annual percentage rate is not readily
available or not applicable, then
(II) the simple interest rate
applicable to the amount reaffirmed as
of the date the disclosure statement is
given to the debtor, or if different
simple interest rates apply to
different balances, the simple interest
rate applicable to each such balance,
identifying the amount of such balance
included in the amount reaffirmed, or
(III) if the entity making the
disclosure elects, to disclose the
annual percentage rate under (I) and
the simple interest rate under (II).
(F) If the underlying debt transaction was disclosed
as a variable rate transaction on the most recent
disclosure given under the Truth in Lending Act, by
stating ``The interest rate on your loan may be a
variable interest rate which changes from time to time,
so that the annual percentage rate disclosed here may
be higher or lower.''.
(G) If the debt is secured by a security interest
which has not been waived in whole or in part or
determined to be void by a final order of the court at
the time of the disclosure, by disclosing that a
security interest or lien in goods or property is
asserted over some or all of the debts the debtor is
reaffirming and listing the items and their original
purchase price that are subject to the asserted
security interest, or if not a purchase-money security
interest then listing by items or types and the
original amount of the loan.
(H) At the election of the creditor, a statement of
the repayment schedule using 1 or a combination of the
following--
(i) by making the statement: ``Your first
payment in the amount of $___ is due on ___ but
the future payment amount may be different.
Consult your reaffirmation agreement or credit
agreement, as applicable.'', and stating the
amount of the first payment and the due date of
that payment in the places provided;
(ii) by making the statement: ``Your payment
schedule will be:'', and describing the
repayment schedule with the number, amount, and
due dates or period of payments scheduled to
repay the debts reaffirmed to the extent then
known by the disclosing party; or
(iii) by describing the debtor's repayment
obligations with reasonable specificity to the
extent then known by the disclosing party.
(I) The following statement: ``Note: When this
disclosure refers to what a creditor`may'do, it does
not use the word`may'to give the creditor specific
permission. The word`may'is used to tell you what might
occur if the law permits the creditor to take the
action. If you have questions about your reaffirming a
debt or what the law requires, consult with the
attorney who helped you negotiate this agreement
reaffirming a debt. If you don't have an attorney
helping you, the judge will explain the effect of your
reaffirming a debt when the hearing on the
reaffirmation agreement is held.''.
(J)(i) The following additional statements:
``Reaffirming a debt is a serious
financial decision. The law requires
you to take certain steps to make sure
the decision is in your best interest.
If these steps are not completed, the
reaffirmation agreement is not
effective, even though you have signed
it.
``1. Read the disclosures in this
Part A carefully. Consider the decision
to reaffirm carefully. Then, if you
want to reaffirm, sign the
reaffirmation agreement in Part B (or
you may use a separate agreement you
and your creditor agree on).
``2. Complete and sign Part D and be
sure you can afford to make the
payments you are agreeing to make and
have received a copy of the disclosure
statement and a completed and signed
reaffirmation agreement.
``3. If you were represented by an
attorney during the negotiation of your
reaffirmation agreement, the attorney
must have signed the certification in
Part C.
``4. If you were not represented by
an attorney during the negotiation of
your reaffirmation agreement, you must
have completed and signed Part E.
``5. The original of this disclosure
must be filed with the court by you or
your creditor. If a separate
reaffirmation agreement (other than the
one in Part B) has been signed, it must
be attached.
``6. If you were represented by an
attorney during the negotiation of your
reaffirmation agreement, your
reaffirmation agreement becomes
effective upon filing with the court
unless the reaffirmation is presumed to
be an undue hardship as explained in
Part D.
``7. If you were not represented by
an attorney during the negotiation of
your reaffirmation agreement, it will
not be effective unless the court
approves it. The court will notify you
of the hearing on your reaffirmation
agreement. You must attend this hearing
in bankruptcy court where the judge
will review your reaffirmation
agreement. The bankruptcy court must
approve your reaffirmation agreement as
consistent with your best interests,
except that no court approval is
required if your reaffirmation
agreement is for a consumer debt
secured by a mortgage, deed of trust,
security deed, or other lien on your
real property, like your home.
``Your right to rescind (cancel) your
reaffirmation agreement. You may
rescind (cancel) your reaffirmation
agreement at any time before the
bankruptcy court enters a discharge
order, or before the expiration of the
60-day period that begins on the date
your reaffirmation agreement is filed
with the court, whichever occurs later.
To rescind (cancel) your reaffirmation
agreement, you must notify the creditor
that your reaffirmation agreement is
rescinded (or canceled).
``What are your obligations if you
reaffirm the debt? A reaffirmed debt
remains your personal legal obligation.
It is not discharged in your bankruptcy
case. That means that if you default on
your reaffirmed debt after your
bankruptcy case is over, your creditor
may be able to take your property or
your wages. Otherwise, your obligations
will be determined by the reaffirmation
agreement which may have changed the
terms of the original agreement. For
example, if you are reaffirming an open
end credit agreement, the creditor may
be permitted by that agreement or
applicable law to change the terms of
that agreement in the future under
certain conditions.
``Are you required to enter into a
reaffirmation agreement by any law? No,
you are not required to reaffirm a debt
by any law. Only agree to reaffirm a
debt if it is in your best interest. Be
sure you can afford the payments you
agree to make.
``What if your creditor has a
security interest or lien? Your
bankruptcy discharge does not eliminate
any lien on your property. A`lien'is
often referred to as a security
interest, deed of trust, mortgage or
security deed. Even if you do not
reaffirm and your personal liability on
the debt is discharged, because of the
lien your creditor may still have the
right to take the property securing the
lien if you do not pay the debt or
default on it. If the lien is on an
item of personal property that is
exempt under your State's law or that
the trustee has abandoned, you may be
able to redeem the item rather than
reaffirm the debt. To redeem, you must
make a single payment to the creditor
equal to the amount of the allowed
secured claim, as agreed by the parties
or determined by the court.''.
(ii) In the case of a reaffirmation under subsection
(m)(2), numbered paragraph 6 in the disclosures
required by clause (i) of this subparagraph shall read
as follows:
``6. If you were represented by an
attorney during the negotiation of your
reaffirmation agreement, your
reaffirmation agreement becomes
effective upon filing with the
court.''.
(4) The form of such agreement required under this
paragraph shall consist of the following:
``Part B: Reaffirmation Agreement. I (we) agree to
reaffirm the debts arising under the credit agreement
described below.
``Brief description of credit agreement:
``Description of any changes to the credit agreement
made as part of this reaffirmation agreement:
``Signature: Date:
``Borrower:
``Co-borrower, if also reaffirming these debts:
``Accepted by creditor:
``Date of creditor acceptance:''.
(5) The declaration shall consist of the following:
(A) The following certification:
``Part C: Certification by Debtor's Attorney (If
Any).
``I hereby certify that (1) this agreement represents
a fully informed and voluntary agreement by the debtor;
(2) this agreement does not impose an undue hardship on
the debtor or any dependent of the debtor; and (3) I
have fully advised the debtor of the legal effect and
consequences of this agreement and any default under
this agreement.
``Signature of Debtor's Attorney: Date:''.
(B) If a presumption of undue hardship has been
established with respect to such agreement, such
certification shall state that, in the opinion of the
attorney, the debtor is able to make the payment.
(C) In the case of a reaffirmation agreement under
subsection (m)(2), subparagraph (B) is not applicable.
(6)(A) The statement in support of such agreement,
which the debtor shall sign and date prior to filing
with the court, shall consist of the following:
``Part D: Debtor's Statement in Support of
Reaffirmation Agreement.
``1. I believe this reaffirmation agreement will not
impose an undue hardship on my dependents or me. I can
afford to make the payments on the reaffirmed debt
because my monthly income (take home pay plus any other
income received) is $___, and my actual current monthly
expenses including monthly payments on post-bankruptcy
debt and other reaffirmation agreements total $___,
leaving $___ to make the required payments on this
reaffirmed debt. I understand that if my income less my
monthly expenses does not leave enough to make the
payments, this reaffirmation agreement is presumed to
be an undue hardship on me and must be reviewed by the
court. However, this presumption may be overcome if I
explain to the satisfaction of the court how I can
afford to make the payments here: ___.
``2. I received a copy of the
Reaffirmation Disclosure Statement in
Part A and a completed and signed
reaffirmation agreement.''.
(B) Where the debtor is represented by an attorney and is
reaffirming a debt owed to a creditor defined in section
19(b)(1)(A)(iv) of the Federal Reserve Act, the statement of
support of the reaffirmation agreement, which the debtor shall
sign and date prior to filing with the court, shall consist of
the following:
``I believe this reaffirmation agreement is
in my financial interest. I can afford to make
the payments on the reaffirmed debt. I received
a copy of the Reaffirmation Disclosure
Statement in Part A and a completed and signed
reaffirmation agreement.''.
(7) The motion that may be used if approval of such
agreement by the court is required in order for it to
be effective, shall be signed and dated by the movant
and shall consist of the following:
``Part E: Motion for Court Approval (To be completed
only if the debtor is not represented by an attorney.).
I (we), the debtor(s), affirm the following to be true
and correct:
``I am not represented by an attorney in connection
with this reaffirmation agreement.
``I believe this reaffirmation agreement is in my
best interest based on the income and expenses I have
disclosed in my Statement in Support of this
reaffirmation agreement, and because (provide any
additional relevant reasons the court should consider):
``Therefore, I ask the court for an order approving
this reaffirmation agreement.''.
(8) The court order, which may be used to approve
such agreement, shall consist of the following:
``Court Order: The court grants the debtor's motion
and approves the reaffirmation agreement described
above.''.
(l) Notwithstanding any other provision of this title the
following shall apply:
(1) A creditor may accept payments from a debtor
before and after the filing of an agreement of the kind
specified in subsection (c) with the court.
(2) A creditor may accept payments from a debtor
under such agreement that the creditor believes in good
faith to be effective.
(3) The requirements of subsections (c)(2) and (k)
shall be satisfied if disclosures required under those
subsections are given in good faith.
(m)(1) Until 60 days after an agreement of the kind specified
in subsection (c) is filed with the court (or such additional
period as the court, after notice and a hearing and for cause,
orders before the expiration of such period), it shall be
presumed that such agreement is an undue hardship on the debtor
if the debtor's monthly income less the debtor's monthly
expenses as shown on the debtor's completed and signed
statement in support of such agreement required under
subsection (k)(6)(A) is less than the scheduled payments on the
reaffirmed debt. This presumption shall be reviewed by the
court. The presumption may be rebutted in writing by the debtor
if the statement includes an explanation that identifies
additional sources of funds to make the payments as agreed upon
under the terms of such agreement. If the presumption is not
rebutted to the satisfaction of the court, the court may
disapprove such agreement. No agreement shall be disapproved
without notice and a hearing to the debtor and creditor, and
such hearing shall be concluded before the entry of the
debtor's discharge.
(2) This subsection does not apply to reaffirmation
agreements where the creditor is a credit union, as
defined in section 19(b)(1)(A)(iv) of the Federal
Reserve Act.
* * * * * * *
SUBCHAPTER III--THE ESTATE
* * * * * * *
Sec. 547. Preferences
(a) In this section--
(1) ``inventory'' means personal property leased or
furnished, held for sale or lease, or to be furnished
under a contract for service, raw materials, work in
process, or materials used or consumed in a business,
including farm products such as crops or livestock,
held for sale or lease;
(2) ``new value'' means money or money's worth in
goods, services, or new credit, or release by a
transferee of property previously transferred to such
transferee in a transaction that is neither void nor
voidable by the debtor or the trustee under any
applicable law, including proceeds of such property,
but does not include an obligation substituted for an
existing obligation;
(3) ``receivable'' means right to payment, whether or
not such right has been earned by performance; and
(4) a debt for a tax is incurred on the day when such
tax is last payable without penalty, including any
extension.
(b) Except as provided in subsections (c) and (i) of this
section, the trustee may, based on reasonable due diligence in
the circumstances of the case and taking into account a party's
known or reasonably knowable affirmative defenses under
subsection (c), avoid any transfer of an interest of the debtor
in property--
(1) to or for the benefit of a creditor;
(2) for or on account of an antecedent debt owed by
the debtor before such transfer was made;
(3) made while the debtor was insolvent;
(4) made--
(A) on or within 90 days before the date of
the filing of the petition; or
(B) between ninety days and one year before
the date of the filing of the petition, if such
creditor at the time of such transfer was an
insider; and
(5) that enables such creditor to receive more than
such creditor would receive if--
(A) the case were a case under chapter 7 of
this title;
(B) the transfer had not been made; and
(C) such creditor received payment of such
debt to the extent provided by the provisions
of this title.
(c) The trustee may not avoid under this section a transfer--
(1) to the extent that such transfer was--
(A) intended by the debtor and the creditor
to or for whose benefit such transfer was made
to be a contemporaneous exchange for new value
given to the debtor; and
(B) in fact a substantially contemporaneous
exchange;
(2) to the extent that such transfer was in payment
of a debt incurred by the debtor in the ordinary course
of business or financial affairs of the debtor and the
transferee, and such transfer was--
(A) made in the ordinary course of business
or financial affairs of the debtor and the
transferee; or
(B) made according to ordinary business
terms;
(3) that creates a security interest in property
acquired by the debtor--
(A) to the extent such security interest
secures new value that was--
(i) given at or after the signing of
a security agreement that contains a
description of such property as
collateral;
(ii) given by or on behalf of the
secured party under such agreement;
(iii) given to enable the debtor to
acquire such property; and
(iv) in fact used by the debtor to
acquire such property; and
(B) that is perfected on or before 30 days
after the debtor receives possession of such
property;
(4) to or for the benefit of a creditor, to the
extent that, after such transfer, such creditor gave
new value to or for the benefit of the debtor--
(A) not secured by an otherwise unavoidable
security interest; and
(B) on account of which new value the debtor
did not make an otherwise unavoidable transfer
to or for the benefit of such creditor;
(5) that creates a perfected security interest in
inventory or a receivable or the proceeds of either,
except to the extent that the aggregate of all such
transfers to the transferee caused a reduction, as of
the date of the filing of the petition and to the
prejudice of other creditors holding unsecured claims,
of any amount by which the debt secured by such
security interest exceeded the value of all security
interests for such debt on the later of--
(A)(i) with respect to a transfer to which
subsection (b)(4)(A) of this section applies,
90 days before the date of the filing of the
petition; or
(ii) with respect to a transfer to
which subsection (b)(4)(B) of this
section applies, one year before the
date of the filing of the petition; or
(B) the date on which new value was first
given under the security agreement creating
such security interest;
(6) that is the fixing of a statutory lien that is
not avoidable under section 545 of this title;
(7) to the extent such transfer was a bona fide
payment of a debt for a domestic support obligation;
(8) if, in a case filed by an individual debtor whose
debts are primarily consumer debts, the aggregate value
of all property that constitutes or is affected by such
transfer is less than $600; or
(9) if, in a case filed by a debtor whose debts are
not primarily consumer debts, the aggregate value of
all property that constitutes or is affected by such
transfer is less than $5,000.
(d) The trustee may avoid a transfer of an interest in
property of the debtor transferred to or for the benefit of a
surety to secure reimbursement of such a surety that furnished
a bond or other obligation to dissolve a judicial lien that
would have been avoidable by the trustee under subsection (b)
of this section. The liability of such surety under such bond
or obligation shall be discharged to the extent of the value of
such property recovered by the trustee or the amount paid to
the trustee.
(e)(1) For the purposes of this section--
(A) a transfer of real property other than
fixtures, but including the interest of a
seller or purchaser under a contract for the
sale of real property, is perfected when a bona
fide purchaser of such property from the debtor
against whom applicable law permits such
transfer to be perfected cannot acquire an
interest that is superior to the interest of
the transferee; and
(B) a transfer of a fixture or property other
than real property is perfected when a creditor
on a simple contract cannot acquire a judicial
lien that is superior to the interest of the
transferee.
(2) For the purposes of this section, except as
provided in paragraph (3) of this subsection, a
transfer is made--
(A) at the time such transfer takes effect between
the transferor and the transferee, if such transfer is
perfected at, or within 30 days after, such time,
except as provided in subsection (c)(3)(B);
(B) at the time such transfer is perfected, if such
transfer is perfected after such 30 days; or
(C) immediately before the date of the filing of the
petition, if such transfer is not perfected at the
later of--
(i) the commencement of the case; or
(ii) 30 days after such transfer takes effect
between the transferor and the transferee.
(3) For the purposes of this section, a transfer is
not made until the debtor has acquired rights in the
property transferred.
(f) For the purposes of this section, the debtor is presumed
to have been insolvent on and during the 90 days immediately
preceding the date of the filing of the petition.
(g) For the purposes of this section, the trustee has the
burden of proving the avoidability of a transfer under
subsection (b) of this section, and the creditor or party in
interest against whom recovery or avoidance is sought has the
burden of proving the nonavoidability of a transfer under
subsection (c) of this section.
(h) The trustee may not avoid a transfer if such transfer was
made as a part of an alternative repayment schedule between the
debtor and any creditor of the debtor created by an approved
nonprofit budget and credit counseling agency.
(i) If the trustee avoids under subsection (b) a transfer
made between 90 days and 1 year before the date of the filing
of the petition, by the debtor to an entity that is not an
insider for the benefit of a creditor that is an insider, such
transfer shall be considered to be avoided under this section
only with respect to the creditor that is an insider.
* * * * * * *
Sec. 557. Expedited determination of interests in, and abandonment or
other disposition of grain assets
(a) This section applies only in a case concerning a debtor
that owns or operates a grain storage facility and only with
respect to grain and the proceeds of grain. This section does
not affect the application of any other section of this title
to property other than grain and proceeds of grain.
(b) In this section--
(1) ``grain'' means wheat, corn, flaxseed, grain
sorghum, barley, oats, rye, soybeans, other dry edible
beans, or rice;
(2) ``grain storage facility'' means a site or
physical structure regularly used to store grain for
producers, or to store grain acquired from producers
for resale; and
(3) ``producer'' means an entity which engages in the
growing of grain.
(c)(1) Notwithstanding sections 362, 363, 365, and 554 of
this title, on the court's own motion the court may, and on the
request of the trustee or an entity that claims an interest in
grain or the proceeds of grain the court shall, expedite the
procedures for the determination of interests in and the
disposition of grain and the proceeds of grain, by shortening
to the greatest extent feasible such time periods as are
otherwise applicable for such procedures and by establishing,
by order, a timetable having a duration of not to exceed 120
days for the completion of the applicable procedure specified
in subsection (d) of this section. Such time periods and such
timetable may be modified by the court, for cause, in
accordance with subsection (f) of this section.
(2) The court shall determine the extent to which
such time periods shall be shortened, based upon--
(A) any need of an entity claiming an interest in
such grain or the proceeds of grain for a prompt
determination of such interest;
(B) any need of such entity for a prompt disposition
of such grain;
(C) the market for such grain;
(D) the conditions under which such grain is stored;
(E) the costs of continued storage or disposition of
such grain;
(F) the orderly administration of the estate;
(G) the appropriate opportunity for an entity to
assert an interest in such grain; and
(H) such other considerations as are relevant to the
need to expedite such procedures in the case.
(d) The procedures that may be expedited under subsection (c)
of this section include--
(1) the filing of and response to--
(A) a claim of ownership;
(B) a proof of claim;
(C) a request for abandonment;
(D) a request for relief from the stay of
action against property under section 362(a) of
this title;
(E) a request for determination of secured
status;
(F) a request for determination of whether
such grain or the proceeds of grain--
(i) is property of the estate;
(ii) must be turned over to the
estate; or
(iii) may be used, sold, or leased;
and
(G) any other request for determination of an
interest in such grain or the proceeds of
grain;
(2) the disposition of such grain or the proceeds of
grain, before or after determination of interests in
such grain or the proceeds of grain, by way of--
(A) sale of such grain;
(B) abandonment;
(C) distribution; or
(D) such other method as is equitable in the
case;
(3) subject to sections 701, 702, 703, 1104, 1183,
1202, and 1302 of this title, the appointment of a
trustee or examiner and the retention and compensation
of any professional person required to assist with
respect to matters relevant to the determination of
interests in or disposition of such grain or the
proceeds of grain; and
(4) the determination of any dispute concerning a
matter specified in paragraph (1), (2), or (3) of this
subsection.
(e)(1) Any governmental unit that has regulatory jurisdiction
over the operation or liquidation of the debtor or the debtor's
business shall be given notice of any request made or order
entered under subsection (c) of this section.
(2) Any such governmental unit may raise, and may
appear and be heard on, any issue relating to grain or
the proceeds of grain in a case in which a request is
made, or an order is entered, under subsection (c) of
this section.
(3) The trustee shall consult with such governmental
unit before taking any action relating to the
disposition of grain in the possession, custody, or
control of the debtor or the estate.
(f) The court may extend the period for final disposition of
grain or the proceeds of grain under this section beyond 120
days if the court finds that--
(1) the interests of justice so require in light of
the complexity of the case; and
(2) the interests of those claimants entitled to
distribution of grain or the proceeds of grain will not
be materially injured by such additional delay.
(g) Unless an order establishing an expedited procedure under
subsection (c) of this section, or determining any interest in
or approving any disposition of grain or the proceeds of grain,
is stayed pending appeal--
(1) the reversal or modification of such order on
appeal does not affect the validity of any procedure,
determination, or disposition that occurs before such
reversal or modification, whether or not any entity
knew of the pendency of the appeal; and
(2) neither the court nor the trustee may delay, due
to the appeal of such order, any proceeding in the case
in which such order is issued.
(h)(1) The trustee may recover from grain and the proceeds of
grain the reasonable and necessary costs and expenses allowable
under section 503(b) of this title attributable to preserving
or disposing of grain or the proceeds of grain, but may not
recover from such grain or the proceeds of grain any other
costs or expenses.
(2) Notwithstanding section 326(a) of this title, the
dollar amounts of money specified in such section
include the value, as of the date of disposition, of
any grain that the trustee distributes in kind.
(i) In all cases where the quantity of a specific type of
grain held by a debtor operating a grain storage facility
exceeds ten thousand bushels, such grain shall be sold by the
trustee and the assets thereof distributed in accordance with
the provisions of this section.
* * * * * * *
CHAPTER 11--REORGANIZATION
SUBCHAPTER I--OFFICERS AND ADMINISTRATION
Sec.
1101. Definitions for this chapter.
* * * * * * *
SUBCHAPTER V--Small business debtor reorganization
1181. Inapplicability of other sections.
1182. Definitions.
1183. Trustee.
1184. Rights and powers of a debtor in possession.
1185. Removal of debtor in possession.
1186. Property of the estate.
1187. Duties and reporting requirements of debtors.
1188. Status conference.
1189. Filing of the plan.
1190. Contents of plan.
1191. Confirmation of plan.
1192. Discharge.
1193. Modification of plan.
1194. Payments.
1195. Transactions with professionals.
SUBCHAPTER I--OFFICERS AND ADMINISTRATION
* * * * * * *
Sec. 1102. Creditors' and equity security holders' committees
(a)(1) Except as provided in paragraph (3), as soon as
practicable after the order for relief under chapter 11 of this
title, the United States trustee shall appoint a committee of
creditors holding unsecured claims and may appoint additional
committees of creditors or of equity security holders as the
United States trustee deems appropriate.
(2) On request of a party in interest, the court may
order the appointment of additional committees of
creditors or of equity security holders if necessary to
assure adequate representation of creditors or of
equity security holders. The United States trustee
shall appoint any such committee.
[(3) On request of a party in interest in a case in which the
debtor is a small business debtor and for cause, the court may
order that a committee of creditors not be appointed.]
(3) Unless the court for cause orders otherwise, a
committee of creditors may not be appointed in a small
business case or a case under subchapter V of this
chapter.
(4) On request of a party in interest and after
notice and a hearing, the court may order the United
States trustee to change the membership of a committee
appointed under this subsection, if the court
determines that the change is necessary to ensure
adequate representation of creditors or equity security
holders. The court may order the United States trustee
to increase the number of members of a committee to
include a creditor that is a small business concern (as
described in section 3(a)(1) of the Small Business
Act), if the court determines that the creditor holds
claims (of the kind represented by the committee) the
aggregate amount of which, in comparison to the annual
gross revenue of that creditor, is disproportionately
large.
(b)(1) A committee of creditors appointed under subsection
(a) of this section shall ordinarily consist of the persons,
willing to serve, that hold the seven largest claims against
the debtor of the kinds represented on such committee, or of
the members of a committee organized by creditors before the
commencement of the case under this chapter, if such committee
was fairly chosen and is representative of the different kinds
of claims to be represented.
(2) A committee of equity security holders appointed
under subsection (a)(2) of this section shall
ordinarily consist of the persons, willing to serve,
that hold the seven largest amounts of equity
securities of the debtor of the kinds represented on
such committee.
(3) A committee appointed under subsection (a)
shall--
(A) provide access to information for creditors who--
(i) hold claims of the kind represented by
that committee; and
(ii) are not appointed to the committee;
(B) solicit and receive comments from the creditors
described in subparagraph (A); and
(C) be subject to a court order that compels any
additional report or disclosure to be made to the
creditors described in subparagraph (A).
* * * * * * *
SUBCHAPTER III--POSTCONFIRMATION MATTERS
* * * * * * *
Sec. 1146. Special tax provisions
(a) The issuance, transfer, or exchange of a security, or the
making or delivery of an instrument of transfer under a plan
confirmed under section 1129 or 1191 of this title, may not be
taxed under any law imposing a stamp tax or similar tax.
(b) The court may authorize the proponent of a plan to
request a determination, limited to questions of law, by a
State or local governmental unit charged with responsibility
for collection or determination of a tax on or measured by
income, of the tax effects, under section 346 of this title and
under the law imposing such tax, of the plan. In the event of
an actual controversy, the court may declare such effects after
the earlier of--
(1) the date on which such governmental unit responds
to the request under this subsection; or
(2) 270 days after such request.
* * * * * * *
SUBCHAPTER V--SMALL BUSINESS DEBTOR REORGANIZATION
Sec. 1181. Inapplicability of other sections
(a) In General.--Sections 105(d), 1101(1), 1104, 1105, 1106,
1107, 1108, 1115, 1116, 1121, 1123(a)(8), 1123(c), 1127,
1129(a)(15), 1129(b), 1129(c), 1129(e), and 1141(d)(5) of this
title do not apply in a case under this subchapter.
(b) Court Authority.--Unless the court for cause orders
otherwise, paragraphs (1), (2), and (4) of section 1102(a) and
sections 1102(b), 1103, and 1125 of this title do not apply in
a case under this subchapter.
(c) Special Rule for Discharge.--If a plan is confirmed under
section 1191(b) of this title, section 1141(d) of this title
shall not apply, except as provided in section 1192 of this
title.
Sec. 1182. Definitions
In this subchapter:
(1) Debtor.--The term ``debtor'' means a small
business debtor.
(2) Debtor in possession.--The term ``debtor in
possession'' means the debtor, unless removed as debtor
in possession under section 1185(a) of this title.
Sec. 1183. Trustee
(a) In General.--If the United States trustee has appointed
an individual under section 586(b) of title 28 to serve as
standing trustee in cases under this subchapter, and if such
individual qualifies as a trustee under section 322 of this
title, then that individual shall serve as trustee in any case
under this subchapter. Otherwise, the United States trustee
shall appoint 1 disinterested person to serve as trustee in the
case or the United States trustee may serve as trustee in the
case, as necessary.
(b) Duties.--The trustee shall--
(1) perform the duties specified in paragraphs (2),
(5), (6), (7), and (9) of section 704(a) of this title;
(2) perform the duties specified in paragraphs (3),
(4), and (7) of section 1106(a) of this title, if the
court, for cause and on request of a party in interest,
the trustee, or the United States trustee, so orders;
(3) appear and be heard at the status conference
under section 1188 of this title and any hearing that
concerns--
(A) the value of property subject to a lien;
(B) confirmation of a plan filed under this
subchapter;
(C) modification of the plan after
confirmation; or
(D) the sale of property of the estate;
(4) ensure that the debtor commences making timely
payments required by a plan confirmed under this
subchapter;
(5) if the debtor ceases to be a debtor in
possession, perform the duties specified in section
704(a)(8) and paragraphs (1), (2), and (6) of section
1106(a) of this title, including operating the business
of the debtor;
(6) if there is a claim for a domestic support
obligation with respect to the debtor, perform the
duties specified in section 704(c) of this title; and
(7) facilitate the development of a consensual plan
of reorganization.
(c) Termination of Trustee Service.--
(1) In general.--If the plan of the debtor is
confirmed under section 1191(a) of this title, the
service of the trustee in the case shall terminate when
the plan has been substantially consummated, except
that the United States trustee may reappoint a trustee
as needed for performance of duties under subsection
(b)(3)(C) of this section and section 1185(a) of this
title.
(2) Service of notice of substantial consummation.--
Not later than 14 days after the plan of the debtor is
substantially consummated, the debtor shall file with
the court and serve on the trustee, the United States
trustee, and all parties in interest notice of such
substantial consummation.
Sec. 1184. Rights and powers of a debtor in possession
Subject to such limitations or conditions as the court may
prescribe, a debtor in possession shall have all the rights,
other than the right to compensation under section 330 of this
title, and powers, and shall perform all functions and duties,
except the duties specified in paragraphs (2), (3), and (4) of
section 1106(a) of this title, of a trustee serving in a case
under this chapter, including operating the business of the
debtor.
Sec. 1185. Removal of debtor in possession
(a) In General.--On request of a party in interest, and after
notice and a hearing, the court shall order that the debtor
shall not be a debtor in possession for cause, including fraud,
dishonesty, incompetence, or gross mismanagement of the affairs
of the debtor, either before or after the date of commencement
of the case, or for failure to perform the obligations of the
debtor under a plan confirmed under this subchapter.
(b) Reinstatement.--On request of a party in interest, and
after notice and a hearing, the court may reinstate the debtor
in possession.
Sec. 1186. Property of the estate
(a) Inclusions.--If a plan is confirmed under section 1191(b)
of this title, property of the estate includes, in addition to
the property specified in section 541 of this title--
(1) all property of the kind specified in that
section that the debtor acquires after the date of
commencement of the case but before the case is closed,
dismissed, or converted to a case under chapter 7, 12,
or 13 of this title, whichever occurs first; and
(2) earnings from services performed by the debtor
after the date of commencement of the case but before
the case is closed, dismissed, or converted to a case
under chapter 7, 12, or 13 of this title, whichever
occurs first.
(b) Debtor Remaining in Possession.--Except as provided in
section 1185 of this title, a plan confirmed under this
subchapter, or an order confirming a plan under this
subchapter, the debtor shall remain in possession of all
property of the estate.
Sec. 1187. Duties and reporting requirements of debtors
(a) Filing Requirements.--Upon electing to be a debtor under
this subchapter, the debtor shall file the documents required
by subparagraphs (A) and (B) of section 1116(1) of this title.
(b) Other Applicable Provisions.--A debtor, in addition to
the duties provided in this title and as otherwise required by
law, shall comply with the requirements of section 308 and
paragraphs (2), (3), (4), (5), (6), and (7) of section 1116 of
this title.
(c) Separate Disclosure Statement Exemption.--If the court
orders under section 1181(b) of this title that section 1125 of
this title applies, section 1125(f) of this title shall apply.
Sec. 1188. Status conference
(a) In General.--Except as provided in subsection (b), not
later than 60 days after the entry of the order for relief
under this chapter, the court shall hold a status conference to
further the expeditious and economical resolution of a case
under this subchapter.
(b) Exception.--The court may extend the period of time for
holding a status conference under subsection (a) if the need
for an extension is attributable to circumstances for which the
debtor should not justly be held accountable.
(c) Report.--Not later than 14 days before the date of the
status conference under subsection (a), the debtor shall file
with the court and serve on the trustee and all parties in
interest a report that details the efforts the debtor has
undertaken and will undertake to attain a consensual plan of
reorganization.
Sec. 1189. Filing of the plan
(a) Who May File a Plan.--Only the debtor may file a plan
under this subchapter.
(b) Deadline.--The debtor shall file a plan not later than 90
days after the order for relief under this chapter, except that
the court may extend the period if the need for the extension
is attributable to circumstances for which the debtor should
not justly be held accountable.
Sec. 1190. Contents of plan
A plan filed under this subchapter--
(1) shall include--
(A) a brief history of the business
operations of the debtor;
(B) a liquidation analysis; and
(C) projections with respect to the ability
of the debtor to make payments under the
proposed plan of reorganization;
(2) shall provide for the submission of all or such
portion of the future earnings or other future income
of the debtor to the supervision and control of the
trustee as is necessary for the execution of the plan;
and
(3) notwithstanding section 1123(b)(5) of this title,
may modify the rights of the holder of a claim secured
only by a security interest in real property that is
the principal residence of the debtor if the new value
received in connection with the granting of the
security interest was--
(A) not used primarily to acquire the real
property; and
(B) used primarily in connection with the
small business of the debtor.
Sec. 1191. Confirmation of plan
(a) Terms.--The court shall confirm a plan under this
subchapter only if all of the requirements of section 1129(a),
other than paragraph (15) of that section, of this title are
met.
(b) Exception.--Notwithstanding section 510(a) of this title,
if all of the applicable requirements of section 1129(a) of
this title, other than paragraphs (8), (10), and (15) of that
section, are met with respect to a plan, the court, on request
of the debtor, shall confirm the plan notwithstanding the
requirements of such paragraphs if the plan does not
discriminate unfairly, and is fair and equitable, with respect
to each class of claims or interests that is impaired under,
and has not accepted, the plan.
(c) Rule of Construction.--For purposes of this section, the
condition that a plan be fair and equitable with respect to
each class of claims or interests includes the following
requirements:
(1) With respect to a class of secured claims, the
plan meets the requirements of section 1129(b)(2)(A) of
this title.
(2) As of the effective date of the plan--
(A) the plan provides that all of the
projected disposable income of the debtor to be
received in the 3-year period, or such longer
period not to exceed 5 years as the court may
fix, beginning on the date that the first
payment is due under the plan will be applied
to make payments under the plan; or
(B) the value of the property to be
distributed under the plan in the 3-year
period, or such longer period not to exceed 5
years as the court may fix, beginning on the
date on which the first distribution is due
under the plan is not less than the projected
disposable income of the debtor.
(3)(A)(i) The debtor will be able to make all
payments under the plan; or
(ii) there is a reasonable likelihood that the debtor
will be able to make all payments under the plan; and
(B) the plan provides appropriate remedies, which may
include the liquidation of nonexempt assets, to protect
the holders of claims or interests in the event that
the payments are not made.
(d) Disposable Income.--For purposes of this section, the
term ``disposable income'' means the income that is received by
the debtor and that is not reasonably necessary to be
expended--
(1) for--
(A) the maintenance or support of the debtor
or a dependent of the debtor; or
(B) a domestic support obligation that first
becomes payable after the date of the filing of
the petition; or
(2) for the payment of expenditures necessary for the
continuation, preservation, or operation of the
business of the debtor.
(e) Special Rule.--Notwithstanding section 1129(a)(9)(A) of
this title, a plan that provides for the payment through the
plan of a claim of a kind specified in paragraph (2) or (3) of
section 507(a) of this title may be confirmed under subsection
(b) of this section.
Sec. 1192. Discharge
If the plan of the debtor is confirmed under section 1191(b)
of this title, as soon as practicable after completion by the
debtor of all payments due within the first 3 years of the
plan, or such longer period not to exceed 5 years as the court
may fix, unless the court approves a written waiver of
discharge executed by the debtor after the order for relief
under this chapter, the court shall grant the debtor a
discharge of all debts provided in section 1141(d)(1)(A) of
this title, and all other debts allowed under section 503 of
this title and provided for in the plan, except any debt--
(1) on which the last payment is due after the first
3 years of the plan, or such other time not to exceed 5
years fixed by the court; or
(2) of the kind specified in section 523(a) of this
title.
Sec. 1193. Modification of plan
(a) Modification Before Confirmation.--The debtor may modify
a plan at any time before confirmation, but may not modify the
plan so that the plan as modified fails to meet the
requirements of sections 1122 and 1123 of this title, with the
exception of subsection (a)(8) of such section 1123. After the
modification is filed with the court, the plan as modified
becomes the plan.
(b) Modification After Confirmation.--If a plan has been
confirmed under section 1191(a) of this title, the debtor may
modify the plan at any time after confirmation of the plan and
before substantial consummation of the plan, but may not modify
the plan so that the plan as modified fails to meet the
requirements of sections 1122 and 1123 of this title, with the
exception of subsection (a)(8) of such section 1123. The plan,
as modified under this subsection, becomes the plan only if
circumstances warrant the modification and the court, after
notice and a hearing, confirms the plan as modified under
section 1191(a) of this title.
(c) Certain Other Modifications.--If a plan has been
confirmed under section 1191(b) of this title, the debtor may
modify the plan at any time within 3 years, or such longer time
not to exceed 5 years, as fixed by the court, but may not
modify the plan so that the plan as modified fails to meet the
requirements of section 1191(b) of this title. The plan as
modified under this subsection becomes the plan only if
circumstances warrant such modification and the court, after
notice and a hearing, confirms such plan, as modified, under
section 1191(b) of this title.
(d) Holders of a Claim or Interest.--If a plan has been
confirmed under section 1191(a) of this title, any holder of a
claim or interest that has accepted or rejected the plan is
deemed to have accepted or rejected, as the case may be, the
plan as modified, unless, within the time fixed by the court,
such holder changes the previous acceptance or rejection of the
holder.
Sec. 1194. Payments
(a) Retention and Distribution by Trustee.--Payments and
funds received by the trustee shall be retained by the trustee
until confirmation or denial of confirmation of a plan. If a
plan is confirmed, the trustee shall distribute any such
payment in accordance with the plan. If a plan is not
confirmed, the trustee shall return any such payments to the
debtor after deducting--
(1) any unpaid claim allowed under section 503(b) of
this title;
(2) any payment made for the purpose of providing
adequate protection of an interest in property due to
the holder of a secured claim; and
(3) any fee owing to the trustee.
(b) Other Plans.--If a plan is confirmed under section
1191(b) of this title, except as otherwise provided in the plan
or in the order confirming the plan, the trustee shall make
payments to creditors under the plan.
(c) Payments Prior to Confirmation.--Prior to confirmation of
a plan, the court, after notice and a hearing, may authorize
the trustee to make payments to the holder of a secured claim
for the purpose of providing adequate protection of an interest
in property.
Sec. 1195. Transactions with professionals
Notwithstanding section 327(a) of this title, a person is not
disqualified for employment under section 327 of this title, by
a debtor solely because that person holds a claim of less than
$10,000 that arose prior to commencement of the case.
* * * * * * *
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TITLE 28, UNITED STATES CODE
* * * * * * *
PART II--DEPARTMENT OF JUSTICE
* * * * * * *
CHAPTER 39--UNITED STATES TRUSTEES
* * * * * * *
Sec. 586. Duties; supervision by Attorney General
(a) Each United States trustee, within the region for which
such United States trustee is appointed, shall--
(1) establish, maintain, and supervise a panel of
private trustees that are eligible and available to
serve as trustees in cases under chapter 7 of title 11;
(2) serve as and perform the duties of a trustee in a
case under title 11 when required under title 11 to
serve as trustee in such a case;
(3) supervise the administration of cases and
trustees in cases under chapter 7, 11 (including
subchapter V of chapter 11), 12, 13, or 15 of title 11
by, whenever the United States trustee considers it to
be appropriate--
(A)(i) reviewing, in accordance with
procedural guidelines adopted by the Executive
Office of the United States Trustee (which
guidelines shall be applied uniformly by the
United States trustee except when circumstances
warrant different treatment), applications
filed for compensation and reimbursement under
section 330 of title 11; and
(ii) filing with the court comments
with respect to such application and,
if the United States Trustee considers
it to be appropriate, objections to
such application;
(B) monitoring plans and disclosure
statements filed in cases under chapter 11 of
title 11 and filing with the court, in
connection with hearings under sections 1125
and 1128 of such title, comments with respect
to such plans and disclosure statements;
(C) monitoring plans filed under chapters 12
and 13 of title 11 and filing with the court,
in connection with hearings under sections
1224, 1229, 1324, and 1329 of such title,
comments with respect to such plans;
(D) taking such action as the United States
trustee deems to be appropriate to ensure that
all reports, schedules, and fees required to be
filed under title 11 and this title by the
debtor are properly and timely filed;
(E) monitoring creditors' committees
appointed under title 11;
(F) notifying the appropriate United States
attorney of matters which relate to the
occurrence of any action which may constitute a
crime under the laws of the United States and,
on the request of the United States attorney,
assisting the United States attorney in
carrying out prosecutions based on such action;
(G) monitoring the progress of cases under
title 11 and taking such actions as the United
States trustee deems to be appropriate to
prevent undue delay in such progress;
(H) in small business cases (as defined in
section 101 of title 11), performing the
additional duties specified in title 11
pertaining to such cases; and
(I) monitoring applications filed under
section 327 of title 11 and, whenever the
United States trustee deems it to be
appropriate, filing with the court comments
with respect to the approval of such
applications;
(4) deposit or invest under section 345 of title 11
money received as trustee in cases under title 11;
(5) perform the duties prescribed for the United
States trustee under title 11 and this title, and such
duties consistent with title 11 and this title as the
Attorney General may prescribe;
(6) make such reports as the Attorney General
directs, including the results of audits performed
under section 603(a) of the Bankruptcy Abuse Prevention
and Consumer Protection Act of 2005;
(7) in each of such small business cases--
(A) conduct an initial debtor interview as
soon as practicable after the date of the order
for relief but before the first meeting
scheduled under section 341(a) of title 11, at
which time the United States trustee shall--
(i) begin to investigate the debtor's
viability;
(ii) inquire about the debtor's
business plan;
(iii) explain the debtor's
obligations to file monthly operating
reports and other required reports;
(iv) attempt to develop an agreed
scheduling order; and
(v) inform the debtor of other
obligations;
(B) if determined to be appropriate and
advisable, visit the appropriate business
premises of the debtor, ascertain the state of
the debtor's books and records, and verify that
the debtor has filed its tax returns; and
(C) review and monitor diligently the
debtor's activities, to determine as promptly
as possible whether the debtor will be unable
to confirm a plan; and
(8) in any case in which the United States trustee
finds material grounds for any relief under section
1112 of title 11, apply promptly after making that
finding to the court for relief.
(b) If the number of cases under subchapter V of chapter 11
or chapter 12 or 13 of title 11 commenced in a particular
region so warrants, the United States trustee for such region
may, subject to the approval of the Attorney General, appoint
one or more individuals to serve as standing trustee, or
designate one or more assistant United States trustees to serve
in cases under such chapter. The United States trustee for such
region shall supervise any such individual appointed as
standing trustee in the performance of the duties of standing
trustee.
(c) Each United States trustee shall be under the general
supervision of the Attorney General, who shall provide general
coordination and assistance to the United States trustees.
(d)(1) The Attorney General shall prescribe by rule
qualifications for membership on the panels established by
United States trustees under paragraph (a)(1) of this section,
and qualifications for appointment under subsection (b) of this
section to serve as standing trustee in cases under subchapter
V of chapter 11 or chapter 12 or 13 of title 11. The Attorney
General may not require that an individual be an attorney in
order to qualify for appointment under subsection (b) of this
section to serve as standing trustee in cases under subchapter
V of chapter 11 or chapter 12 or 13 of title 11.
(2) A trustee whose appointment under subsection (a)(1) or
under subsection (b) is terminated or who ceases to be assigned
to cases filed under title 11, United States Code, may obtain
judicial review of the final agency decision by commencing an
action in the district court of the United States for the
district for which the panel to which the trustee is appointed
under subsection (a)(1), or in the district court of the United
States for the district in which the trustee is appointed under
subsection (b) resides, after first exhausting all available
administrative remedies, which if the trustee so elects, shall
also include an administrative hearing on the record. Unless
the trustee elects to have an administrative hearing on the
record, the trustee shall be deemed to have exhausted all
administrative remedies for purposes of this paragraph if the
agency fails to make a final agency decision within 90 days
after the trustee requests administrative remedies. The
Attorney General shall prescribe procedures to implement this
paragraph. The decision of the agency shall be affirmed by the
district court unless it is unreasonable and without cause
based on the administrative record before the agency.
(e)(1) The Attorney General, after consultation with a United
States trustee that has appointed an individual under
subsection (b) of this section to serve as standing trustee in
cases under subchapter V of chapter 11 or chapter 12 or 13 of
title 11, shall fix--
(A) a maximum annual compensation for such individual
consisting of--
(i) an amount not to exceed the highest
annual rate of basic pay in effect for level V
of the Executive Schedule; and
(ii) the cash value of employment benefits
comparable to the employment benefits provided
by the United States to individuals who are
employed by the United States at the same rate
of basic pay to perform similar services during
the same period of time; and
(B) a percentage fee not to exceed--
(i) in the case of a debtor who is not a
family farmer, ten percent; or
(ii) in the case of a debtor who is a family
farmer, the sum of--
(I) not to exceed ten percent of the
payments made under the plan of such
debtor, with respect to payments in an
aggregate amount not to exceed
$450,000; and
(II) three percent of payments made
under the plan of such debtor, with
respect to payments made after the
aggregate amount of payments made under
the plan exceeds $450,000;
based on such maximum annual compensation and the actual,
necessary expenses incurred by such individual as standing
trustee.
(2) Such individual shall collect such percentage fee from
all payments received by such individual under plans in the
cases under subchapter V of chapter 11 or chapter 12 or 13 of
title 11 for which such individual serves as standing trustee.
Such individual shall pay to the United States trustee, and the
United States trustee shall deposit in the United States
Trustee System Fund--
(A) any amount by which the actual compensation of
such individual exceeds 5 per centum upon all payments
received under plans in cases under subchapter V of
chapter 11 or chapter 12 or 13 of title 11 for which
such individual serves as standing trustee; and
(B) any amount by which the percentage for all such
cases exceeds--
(i) such individual's actual compensation for
such cases, as adjusted under subparagraph (A)
of paragraph (1); plus
(ii) the actual, necessary expenses incurred
by such individual as standing trustee in such
cases. Subject to the approval of the Attorney
General, any or all of the interest earned from
the deposit of payments under plans by such
individual may be utilized to pay actual,
necessary expenses without regard to the
percentage limitation contained in subparagraph
(d)(1)(B) of this section.
(3) After first exhausting all available
administrative remedies, an individual appointed under
subsection (b) may obtain judicial review of final
agency action to deny a claim of actual, necessary
expenses under this subsection by commencing an action
in the district court of the United States for the
district where the individual resides. The decision of
the agency shall be affirmed by the district court
unless it is unreasonable and without cause based upon
the administrative record before the agency.
(4) The Attorney General shall prescribe procedures
to implement this subsection.
(5) In the event that the services of the trustee in a case
under subchapter V of chapter 11 of title 11 are terminated by
dismissal or conversion of the case, or upon substantial
consummation of a plan under section 1183(c)(1) of that title,
the court shall award compensation to the trustee consistent
with services performed by the trustee and the limits on the
compensation of the trustee established pursuant to paragraph
(1) of this subsection.
(f)(1) The United States trustee for each district is
authorized to contract with auditors to perform audits in cases
designated by the United States trustee, in accordance with the
procedures established under section 603(a) of the Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005.
(2)(A) The report of each audit referred to in
paragraph (1) shall be filed with the court and
transmitted to the United States trustee. Each report
shall clearly and conspicuously specify any material
misstatement of income or expenditures or of assets
identified by the person performing the audit. In any
case in which a material misstatement of income or
expenditures or of assets has been reported, the clerk
of the district court (or the clerk of the bankruptcy
court if one is certified under section 156(b) of this
title) shall give notice of the misstatement to the
creditors in the case.
(B) If a material misstatement of income or expenditures or
of assets is reported, the United States trustee shall--
(i) report the material misstatement, if appropriate,
to the United States Attorney pursuant to section 3057
of title 18; and
(ii) if advisable, take appropriate action, including
but not limited to commencing an adversary proceeding
to revoke the debtor's discharge pursuant to section
727(d) of title 11.
* * * * * * *
Sec. 589b. Bankruptcy data
(a) Rules.--The Attorney General shall, within a reasonable
time after the effective date of this section, issue rules
requiring uniform forms for (and from time to time thereafter
to appropriately modify and approve)--
(1) final reports by trustees in cases under
subchapter V of chapter 11 and chapters 7, 12, and 13
of title 11; and
(2) periodic reports by debtors in possession or
trustees in cases under chapter 11 of title 11.
(b) Reports.--Each report referred to in subsection (a) shall
be designed (and the requirements as to place and manner of
filing shall be established) so as to facilitate compilation of
data and maximum possible access of the public, both by
physical inspection at one or more central filing locations,
and by electronic access through the Internet or other
appropriate media.
(c) Required Information.--The information required to be
filed in the reports referred to in subsection (b) shall be
that which is in the best interests of debtors and creditors,
and in the public interest in reasonable and adequate
information to evaluate the efficiency and practicality of the
Federal bankruptcy system. In issuing rules proposing the forms
referred to in subsection (a), the Attorney General shall
strike the best achievable practical balance between--
(1) the reasonable needs of the public for
information about the operational results of the
Federal bankruptcy system;
(2) economy, simplicity, and lack of undue burden on
persons with a duty to file reports; and
(3) appropriate privacy concerns and safeguards.
(d) Final Reports.--The uniform forms for final reports
required under subsection (a) for use by trustees under
subchapter V of chapter 11 and chapters 7, 12, and 13 of title
11 shall, in addition to such other matters as are required by
law or as the Attorney General in the discretion of the
Attorney General shall propose, include with respect to a case
under such title--
(1) information about the length of time the case was
pending;
(2) assets abandoned;
(3) assets exempted;
(4) receipts and disbursements of the estate;
(5) expenses of administration, including for use
under section 707(b), actual costs of administering
cases under subchapter V of chapter 11 and chapter 13
of title 11;
(6) claims asserted;
(7) claims allowed; and
(8) distributions to claimants and claims discharged
without payment,
in each case by appropriate category and, in cases under
subchapter V of chapter 11 and chapters 12 and 13 of title 11,
date of confirmation of the plan, each modification thereto,
and defaults by the debtor in performance under the plan.
(e) Periodic Reports.--The uniform forms for periodic reports
required under subsection (a) for use by trustees or debtors in
possession under chapter 11 of title 11 shall, in addition to
such other matters as are required by law or as the Attorney
General in the discretion of the Attorney General shall
propose, include--
(1) information about the industry classification,
published by the Department of Commerce, for the
businesses conducted by the debtor;
(2) length of time the case has been pending;
(3) number of full-time employees as of the date of
the order for relief and at the end of each reporting
period since the case was filed;
(4) cash receipts, cash disbursements and
profitability of the debtor for the most recent period
and cumulatively since the date of the order for
relief;
(5) compliance with title 11, whether or not tax
returns and tax payments since the date of the order
for relief have been timely filed and made;
(6) all professional fees approved by the court in
the case for the most recent period and cumulatively
since the date of the order for relief (separately
reported, for the professional fees incurred by or on
behalf of the debtor, between those that would have
been incurred absent a bankruptcy case and those not);
and
(7) plans of reorganization filed and confirmed and,
with respect thereto, by class, the recoveries of the
holders, expressed in aggregate dollar values and, in
the case of claims, as a percentage of total claims of
the class allowed.
* * * * * * *
PART IV--JURISDICTION AND VENUE
* * * * * * *
CHAPTER 87--DISTRICT COURTS; VENUE
* * * * * * *
Sec. 1409. Venue of proceedings arising under title 11 or arising in or
related to cases under title 11
(a) Except as otherwise provided in subsections (b) and (d),
a proceeding arising under title 11 or arising in or related to
a case under title 11 may be commenced in the district court in
which such case is pending.
(b) Except as provided in subsection (d) of this section, a
trustee in a case under title 11 may commence a proceeding
arising in or related to such case to recover a money judgment
of or property worth less than $1,000 or a consumer debt of
less than $15,000, or a debt (excluding a consumer debt)
against a noninsider of less than [$10,000] $25,000, only in
the district court for the district in which the defendant
resides.
(c) Except as provided in subsection (b) of this section, a
trustee in a case under title 11 may commence a proceeding
arising in or related to such case as statutory successor to
the debtor or creditors under section 541 or 544(b) of title 11
in the district court for the district where the State or
Federal court sits in which, under applicable nonbankruptcy
venue provisions, the debtor or creditors, as the case may be,
may have commenced an action on which such proceeding is based
if the case under title 11 had not been commenced.
(d) A trustee may commence a proceeding arising under title
11 or arising in or related to a case under title 11 based on a
claim arising after the commencement of such case from the
operation of the business of the debtor only in the district
court for the district where a State or Federal court sits in
which, under applicable nonbankruptcy venue provisions, an
action on such claim may have been brought.
(e) A proceeding arising under title 11 or arising in or
related to a case under title 11, based on a claim arising
after the commencement of such case from the operation of the
business of the debtor, may be commenced against the
representative of the estate in such case in the district court
for the district where the State or Federal court sits in which
the party commencing such proceeding may, under applicable
nonbankruptcy venue provisions, have brought an action on such
claim, or in the district court in which such case is pending.
* * * * * * *
PART V--PROCEDURE
* * * * * * *
CHAPTER 123--FEES AND COSTS
* * * * * * *
Sec. 1930. Bankruptcy fees
(a) The parties commencing a case under title 11 shall pay to
the clerk of the district court or the clerk of the bankruptcy
court, if one has been certified pursuant to section 156(b) of
this title, the following filing fees:
(1) For a case commenced under--
(A) chapter 7 of title 11, $245, and
(B) chapter 13 of title 11, $235.
(2) For a case commenced under chapter 9 of title 11,
equal to the fee specified in paragraph (3) for filing
a case under chapter 11 of title 11. The amount by
which the fee payable under this paragraph exceeds $300
shall be deposited in the fund established under
section 1931 of this title.
(3) For a case commenced under chapter 11 of title 11
that does not concern a railroad, as defined in section
101 of title 11, $1,167.
(4) For a case commenced under chapter 11 of title 11
concerning a railroad, as so defined, $1,000.
(5) For a case commenced under chapter 12 of title
11, $200.
(6)(A) Except as provided in subparagraph (B), in
addition to the filing fee paid to the clerk, a
quarterly fee shall be paid to the United States
trustee, for deposit in the Treasury, in each case
under chapter 11 of title 11, other than under
subchapter V, for each quarter (including any fraction
thereof) until the case is converted or dismissed,
whichever occurs first. The fee shall be $325 for each
quarter in which disbursements total less than $15,000;
$650 for each quarter in which disbursements total
$15,000 or more but less than $75,000; $975 for each
quarter in which disbursements total $75,000 or more
but less than $150,000; $1,625 for each quarter in
which disbursements total $150,000 or more but less
than $225,000; $1,950 for each quarter in which
disbursements total $225,000 or more but less than
$300,000; $4,875 for each quarter in which
disbursements total $300,000 or more but less than
$1,000,000; $6,500 for each quarter in which
disbursements total $1,000,000 or more but less than
$2,000,000; $9,750 for each quarter in which
disbursements total $2,000,000 or more but less than
$3,000,000; $10,400 for each quarter in which
disbursements total $3,000,000 or more but less than
$5,000,000; $13,000 for each quarter in which
disbursements total $5,000,000 or more but less than
$15,000,000; $20,000 for each quarter in which
disbursements total $15,000,000 or more but less than
$30,000,000; $30,000 for each quarter in which
disbursements total more than $30,000,000. The fee
shall be payable on the last day of the calendar month
following the calendar quarter for which the fee is
owed.
(B) During each of fiscal years 2018 through 2022, if
the balance in the United States Trustee System Fund as
of September 30 of the most recent full fiscal year is
less than $200,000,000, the quarterly fee payable for a
quarter in which disbursements equal or exceed
$1,000,000 shall be the lesser of 1 percent of such
disbursements or $250,000.
(7) In districts that are not part of a United States
trustee region as defined in section 581 of this title,
the Judicial Conference of the United States may
require the debtor in a case under chapter 11 of title
11 to pay fees equal to those imposed by paragraph (6)
of this subsection. Such fees shall be deposited as
offsetting receipts to the fund established under
section 1931 of this title and shall remain available
until expended.
An individual commencing a voluntary case or a joint case under
title 11 may pay such fee in installments. For converting, on
request of the debtor, a case under chapter 7, or 13 of title
11, to a case under chapter 11 of title 11, the debtor shall
pay to the clerk of the district court or the clerk of the
bankruptcy court, if one has been certified pursuant to section
156(b) of this title, a fee of the amount equal to the
difference between the fee specified in paragraph (3) and the
fee specified in paragraph (1).
(b) The Judicial Conference of the United States may
prescribe additional fees in cases under title 11 of the same
kind as the Judicial Conference prescribes under section
1914(b) of this title.
(c) Upon the filing of any separate or joint notice of appeal
or application for appeal or upon the receipt of any order
allowing, or notice of the allowance of, an appeal or a writ of
certiorari $5 shall be paid to the clerk of the court, by the
appellant or petitioner.
(d) Whenever any case or proceeding is dismissed in any
bankruptcy court for want of jurisdiction, such court may order
the payment of just costs.
(e) The clerk of the court may collect only the fees
prescribed under this section.
(f)(1) Under the procedures prescribed by the Judicial
Conference of the United States, the district court or the
bankruptcy court may waive the filing fee in a case under
chapter 7 of title 11 for an individual if the court determines
that such individual has income less than 150 percent of the
income official poverty line (as defined by the Office of
Management and Budget, and revised annually in accordance with
section 673(2) of the Omnibus Budget Reconciliation Act of
1981) applicable to a family of the size involved and is unable
to pay that fee in installments. For purposes of this
paragraph, the term ``filing fee'' means the filing fee
required by subsection (a), or any other fee prescribed by the
Judicial Conference under subsections (b) and (c) that is
payable to the clerk upon the commencement of a case under
chapter 7.
(2) The district court or the bankruptcy court may
waive for such debtors other fees prescribed under
subsections (b) and (c).
(3) This subsection does not restrict the district
court or the bankruptcy court from waiving, in
accordance with Judicial Conference policy, fees
prescribed under this section for other debtors and
creditors.
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