CHAPTER 1GENERAL PROVISIONS
Sec. 102. Rules of construction
In this title--
(1) ``after notice and a hearing'', or a similar phrase--
(A) means after such notice as is appropriate in the
particular circumstances, and such opportunity for a hearing as
is appropriate in the particular circumstances; but
(B) authorizes an act without an actual hearing if such
notice is given properly and if--
(i) such a hearing is not requested timely by a party in
(ii) there is insufficient time for a hearing to be
commenced before such act must be done, and the court
authorizes such act;
(2) ``claim against the debtor'' includes claim against property
of the debtor;
(3) ``includes'' and ``including'' are not limiting;
(4) ``may not'' is prohibitive, and not permissive;
(5) ``or'' is not exclusive;
(6) ``order for relief'' means entry of an order for relief;
(7) the singular includes the plural;
(8) a definition, contained in a section of this title that
refers to another section of this title, does not, for the purpose
of such reference, affect the meaning of a term used in such other
(9) ``United States trustee'' includes a designee of the United
(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2554; Pub. L. 98-353, title III,
Sec. 422, July 10, 1984, 98 Stat. 369; Pub. L. 99-554, title II,
Sec. 202, Oct. 27, 1986, 100 Stat. 3097.)
Historical and Revision Notes
Section 102 specifies various rules of construction but is not
exclusive. Other rules of construction that are not set out in title 11
are nevertheless intended to be followed in construing the bankruptcy
code. For example, the phrase ``on request of a party in interest'' or a
similar phrase, is used in connection with an action that the court may
take in various sections of the Code. The phrase is intended to restrict
the court from acting sua sponte. Rules of bankruptcy procedure or court
decisions will determine who is a party in interest for the particular
purposes of the provision in question, but the court will not be
permitted to act on its own.
Although ``property'' is not construed in this section, it is used
consistently throughout the code in its broadest sense, including cash,
all interests in property, such as liens, and every kind of
consideration including promises to act or forbear to act as in section
Section 102(1) expands on a rule of construction contained in H.R.
8200 as passed by the House and in the Senate amendment. The phrase
``after notice and a hearing'', or a similar phrase, is intended to be
construed according to the particular proceeding to mean after such
notice as is appropriate in the particular circumstances, and such
opportunity, if any, for a hearing as is appropriate in the particular
circumstances. If a provision of title 11 authorizes an act to be taken
``after notice and a hearing'' this means that if appropriate notice is
given and no party to whom such notice is sent timely requests a
hearing, then the act sought to be taken may be taken without an actual
In very limited emergency circumstances, there will be insufficient
time for a hearing to be commenced before an action must be taken. The
action sought to be taken may be taken if authorized by the court at an
ex parte hearing of which a record is made in open court. A full hearing
after the fact will be available in such an instance.
In some circumstances, such as under section 1128, the bill requires
a hearing and the court may act only after a hearing is held. In those
circumstances the judge will receive evidence before ruling. In other
circumstances, the court may take action ``after notice and a hearing,''
if no party in interest requests a hearing. In that event a court order
authorizing the action to be taken is not necessary as the ultimate
action taken by the court implies such an authorization.
Section 102(8) is new. It contains a rule of construction indicating
that a definition contained in a section in title 11 that refers to
another section of title 11 does not, for the purposes of such
reference, take the meaning of a term used in the other section. For
example, section 522(a)(2) defines ``value'' for the purposes of section
522. Section 548(d)(2) defines ``value'' for purposes of section 548.
When section 548 is incorporated by reference in section 522, this rule
of construction makes clear that the definition of ``value'' in section
548 governs its meaning in section 522 notwithstanding a different
definition of ``value'' in section 522(a)(2).
senate report no. 95-989
Section 102 provides seven rules of construction. Some are derived
from current law; others are derived from 1 U.S.C. 1; a few are new.
They apply generally throughout proposed title 11. These are terms that
are not appropriate for definition, but that require an explanation.
Paragraph (1) defines the concept of ``after notice and a hearing.''
The concept is central to the bill and to the separation of the
administrative and judicial functions of bankruptcy judges. The phrase
means after such notice as is appropriate in the particular
circumstances (to be prescribed by either the Rules of Bankruptcy
Procedure or by the court in individual circumstances that the Rules do
not cover. In many cases, the Rules will provide for combined notice of
several proceedings), and such opportunity for a hearing as is
appropriate in the particular circumstances. Thus, a hearing will not be
necessary in every instance. If there is no objection to the proposed
action, the action may go ahead without court action. This is a
significant change from present law, which requires the affirmative
approval of the bankruptcy judge for almost every action. The change
will permit the bankruptcy judge to stay removed from the administration
of the bankruptcy or reorganization case, and to become involved only
when there is a dispute about a proposed action, that is, only when
there is an objection. The phrase ``such opportunity for a hearing as is
appropriate in the particular circumstances'' is designed to permit the
Rules and the courts to expedite or dispense with hearings when speed is
essential. The language ``or similar phrase'' is intended to cover the
few instances in the bill where ``after notice and a hearing'' is
interrupted by another phrase, such as ``after notice to the debtor and
Paragraph (2) specifies that ``claim against the debtor'' includes
claim against property of the debtor. This paragraph is intended to
cover nonrecourse loan agreements where the creditor's only rights are
against property of the debtor, and not against the debtor personally.
Thus, such an agreement would give rise to a claim that would be treated
as a claim against the debtor personally, for the purposes of the
Paragraph (3) is a codification of American Surety Co. v. Marotta,
287 U.S. 513 (1933). It specifies that ``includes'' and ``including''
are not limiting.
Paragraph (4) specifies that ``may not'' is prohibitive and not
permissive (such as in ``might not'').
Paragraph (5) specifies that ``or'' is not exclusive. Thus, if a
party ``may do (a) or (b)'', then the party may do either or both. The
party is not limited to a mutually exclusive choice between the two
Paragraph (6) makes clear that ``order for relief'' means entry of
an order for relief. If the court orally orders relief, but the order is
not entered until a later time, then any time measurements in the bill
are from entry, not from the oral order. In a voluntary case, the entry
of the order for relief is the filing of the petition commencing the
Paragraph (7) specifies that the singular includes the plural. The
plural, however, generally does not include the singular. The bill uses
only the singular, even when the item in question most often is found in
plural quantities, in order to avoid the confusion possible if both
rules of construction applied. When an item is specified in the plural,
the plural is intended.
1986--Par. (9). Pub. L. 99-554 added par. (9).
1984--Par. (8). Pub. L. 98-353 substituted ``contained'' for
Effective Date of 1986 Amendment
Effective date and applicability of amendment by Pub. L. 99-554
dependent upon the judicial district involved, see section 302(d), (e)
of Pub. L. 99-554, set out as a note under section 581 of Title 28,
Judiciary and Judicial Procedure.
Effective Date of 1984 Amendment
Amendment by Pub. L. 98-353 effective with respect to cases filed 90
days after July 10, 1984, see section 552(a) of Pub. L. 98-353, set out
as a note under section 101 of this title.