Bankruptcy Forms: Filing Bankruptcy Chapter 7 Bankruptcy Software Chapter 13

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TITLE 11–BANKRUPTCY

CHAPTER 11– REORGANIZATION

Sub Chapter IV – Railroad Reorganization

Sec. 1170. Abandonment of railroad line

  (a) The court, after notice and a hearing, may authorize the 
abandonment of all or a portion of a railroad line if such abandonment 
is--
        (1)(A) in the best interest of the estate; or
        (B) essential to the formulation of a plan; and
        (2) consistent with the public interest.

    (b) If, except for the pendency of the case under this chapter, such 
abandonment would require approval by the Board under a law of the 
United States, the trustee shall initiate an appropriate application for 
such abandonment with the Board. The court may fix a time within which 
the Board shall report to the court on such application.
    (c) After the court receives the report of the Board, or the 
expiration of the time fixed under subsection (b) of this section, 
whichever occurs first, the court may authorize such abandonment, after 
notice to the Board, the Secretary of Transportation, the trustee, any 
party in interest that has requested notice, any affected shipper or 
community, and any other entity prescribed by the court, and a hearing.
    (d)(1) Enforcement of an order authorizing such abandonment shall be 
stayed until the time for taking an appeal has expired, or, if an appeal 
is timely taken, until such order has become final.
    (2) If an order authorizing such abandonment is appealed, the court, 
on request of a party in interest, may authorize suspension of service 
on a line or a portion of a line pending the determination of such 
appeal, after notice to the Board, the Secretary of Transportation, the 
trustee, any party in interest that has requested notice, any affected 
shipper or community, and any other entity prescribed by the court, and 
a hearing. An appellant may not obtain a stay of the enforcement of an 
order authorizing such suspension by the giving of a supersedeas bond or 
otherwise, during the pendency of such appeal.
    (e)(1) In authorizing any abandonment of a railroad line under this 
section, the court shall require the rail carrier to provide a fair 
arrangement at least as protective of the interests of employees as that 
established under section 11347 \1\ of title 49.
---------------------------------------------------------------------------
    \1\ See References in Text note below.
---------------------------------------------------------------------------
    (2) Nothing in this subsection shall be deemed to affect the 
priorities or timing of payment of employee protection which might have 
existed in the absence of this subsection.

(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2643; Pub. L. 96-448, title II, 
Sec. 227(a), Oct. 14, 1980, 94 Stat. 1931; Pub. L. 98-353, title III, 
Sec. 521, July 10, 1984, 98 Stat. 388; Pub. L. 104-88, title III, 
Sec. 302(2), Dec. 29, 1995, 109 Stat. 943.)


                      Historical and Revision Notes

                        senate report no. 95-989

    Subsection (a) of section 1178 [enacted as section 1170] permits the 
court to authorize the abandonment of a railroad line if the abandonment 
is consistent with the public interest and either in the best interest 
of the estate or essential to the formulation of a plan. This avoids the 
normal abandonment requirements of generally applicable railroad 
regulatory law.
    Subsection (b) permits some participation by the Interstate Commerce 
Commission in the abandonment process. The Commission's role, however, 
is only advisory. The Commission will represent the public interest, 
while the trustee and various creditors and equity security holders will 
represent the interests of those who have invested money in the 
enterprise. The court will balance the various interests and make an 
appropriate decision. The subsection specifies that if, except for the 
pendency of the railroad reorganization case, the proposed abandonment 
would require Commission approval, then the trustee, with the approval 
of the court, must initiate an application for the abandonment with the 
Commission. The court may then fix a time within which the Commission 
must report to the court on the application.
    Subsection (c) permits the court to act after it has received the 
report of the Commission or the time fixed under subsection (b) has 
expired, whichever occurs first. The court may then authorize the 
abandonment after notice and a hearing. The notice must go to the 
Commission, the Secretary of Transportation, the trustee, and party in 
interest that has requested notice, any affected shipper or community, 
and any other entity that the court specifies.
    Subsection (d) stays the enforcement of an abandonment until the 
time for taking an appeal has expired, or if an appeal has been taken, 
until the order has become final. However, the court may, and after 
notice and a hearing, on request of a party in interest authorize 
termination of service on the line or a portion of the line pending the 
determination of the appeal. The notice required is the same as that 
required under subsection (c). If the court authorizes termination of 
service pending determination of the appeal, an appellant may not obtain 
a stay of the enforcement of the order authorizing termination, either 
by the giving of a supersedeas bond or otherwise, during the pendency of 
the appeal.

                       References in Text

    Section 11347 of title 49, referred to in subsec. (e)(1), was 
omitted in the general amendment of subtitle IV of Title 49, 
Transportation, by Pub. L. 104-88, title I, Sec. 102(a), Dec. 29, 1995, 
109 Stat. 804. For provisions similar to those contained in section 
11347, see section 11326(a) of Title 49.


                               Amendments

    1995--Subsecs. (b), (c), (d)(2). Pub. L. 104-88 substituted 
``Board'' for ``Commission'' wherever appearing.
    1984--Subsec. (a). Pub. L. 98-353, Sec. 521(a), inserted ``of all or 
a portion'' after ``the abandonment''.
    Subsec. (c). Pub. L. 98-353, Sec. 521(b), inserted a comma after 
``abandonment''.
    Subsec. (d)(2). Pub. L. 98-353, Sec. 521(c), substituted ``such 
abandonment'' for ``the abandonment of a railroad line'', and 
``suspension'' for ``termination'' in two places.
    1980--Subsec. (e). Pub. L. 96-448 added subsec. (e).


                    Effective Date of 1995 Amendment

    Amendment by Pub. L. 104-88 effective Jan. 1, 1996, see section 2 of 
Pub. L. 104-88, set out as an Effective Date note under section 701 of 
Title 49, Transportation.


                    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.


                    Effective Date of 1980 Amendment

    Section 710 of Pub. L. 96-448 provided that:
    ``(a) Except as provided in subsections (b), (c), and (d) of this 
section, the provisions of this Act and the amendments made by this Act 
[see Tables for classification] shall take effect on October 1, 1980.
    ``(b) Section 206 of this Act [enacting former section 10712 of 
Title 49, Transportation] shall take effect on January 1, 1981.
    ``(c) Section 218(b) of this Act [amending former section 10705 of 
Title 49] shall take effect on October 1, 1983.
    ``(d) Section 701 of this Act [enacting section 1018 of Title 45, 
Railroads, and amending sections 231f, 825, 906, 913, 914, 1002, 1005, 
1007, and 1008 of Title 45] shall take effect on the date of enactment 
of this Act [Oct. 14, 1980].''

                  Section Referred to in Other Sections

    This section is referred to in sections 1165, 1166, 1169, 1172 of 
this title; title 45 sections 904, 915.


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