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TITLE 11–BANKRUPTCY

CHAPTER 11– REORGANIZATION

Sub Chapter IV – Railroad Reorganization

Sec. 1169. Effect of rejection of lease of railroad line


    (a) Except as provided in subsection (b) of this section, if a lease 
of a line of railroad under which the debtor is the lessee is rejected 
under section 365 of this title, and if the trustee, within such time as 
the court fixes, and with the court's approval, elects not to operate 
the leased line, the lessor under such lease, after such approval, shall 
operate the line.
    (b) If operation of such line by such lessor is impracticable or 
contrary to the public interest, the court, on request of such lessor, 
and after notice and a hearing, shall order the trustee to continue 
operation of such line for the account of such lessor until abandonment 
is ordered under section 1170 of this title, or until such operation is 
otherwise lawfully terminated, whichever occurs first.
    (c) During any such operation, such lessor is deemed a carrier 
subject to the provisions of subtitle IV of title 49 that are applicable 
to railroads.

(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2643; Pub. L. 97-449, 
Sec. 5(a)(3), Jan. 12, 1983, 96 Stat. 2442; Pub. L. 98-353, title III, 
Sec. 520, July 10, 1984, 98 Stat. 388.)


                      Historical and Revision Notes

                         legislative statements

    Section 1169 of the Senate amendment is deleted from the House 
amendment as unnecessary since 28 U.S.C. 1407 treating with the judicial 
panel on multi-district litigation will apply by its terms to cases 
under title 11.


                        senate report no. 95-989

    Section 1177 [enacted as section 1169] continues, essentially 
without change, the provisions relating to the rejection by the trustee 
of a lease of a line of railroad now contained in section 77(c)(6) 
[section 205(c)(6) of former title 11]. Subsection (a) requires the 
lessor of a line of railroad to operate it if the lease is rejected by 
the trustee and the trustee, with the approval of the court, elects not 
to operate the leased line. Subsection (b), however, further provides 
that if operation by the lessor is impractical or contrary to the public 
interest, the court shall require the trustee to operate the line for 
the account of the lessor until the operation is lawfully terminated. 
Subsection (c) provides that during such operation, the lessor is a 
carrier subject to the Interstate Commerce Act [49 U.S.C. 10101 et 
seq.].


                         house report no. 95-595

    [Section 1168] This section [enacted as section 1169] governs the 
effect of the rejection by the trustee of an unexpired lease of railroad 
line under which the debtor is the lessee. If the trustee rejects such a 
lease, and if the trustee, within such time as the court allows, and 
with the approval of the court, elects not to operate the leased line, 
then the lessor under the lease must operate the line.
    Subsection (b) excuses the lessor from the requirement to operate 
the line under certain circumstances. If operation of the line by the 
lessor is impracticable or contrary to the public interest, the court, 
on request of the lessor, must order the trustee to continue operation 
of the line for the account of the lessor until abandonment is ordered 
under section 1169, governing abandonments generally, or until the 
operation is otherwise lawfully terminated, such as by an order of the 
ICC.
    Subsection (c) deems the lessor a carrier subject to the provisions 
of the Interstate Commerce Act [49 U.S.C. 10101 et seq.] during the 
operation of the line before abandonment.


                               Amendments

    1984--Subsec. (c). Pub. L. 98-353 directed substitution of 
``subtitle IV of title 49'' for ``the Interstate Commerce Act (49 U.S.C. 
1 et seq.)'', which substitution had previously been made by Pub. L. 97-
449.
    1983--Subsec. (c). Pub. L. 97-449 substituted ``subtitle IV of title 
49'' for ``the Interstate Commerce Act (49 U.S.C. Sec. 1 et seq.)''.

                  Section Referred to in Other Sections

    This section is referred to in section 1165 of this title.


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