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. 1174. Liquidation

 On request of a party in interest and after notice and a hearing, 
the court may, or, if a plan has not been confirmed under section 1173 
of this title before five years after the date of the order for relief, 
the court shall, order the trustee to cease the debtor's operation and 
to collect and reduce to money all of the property of the estate in the 
same manner as if the case were a case under chapter 7 of this title.

(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2644.)


                      Historical and Revision Notes

                         legislative statements

    Section 1174 of the House amendment represents a compromise between 
the House bill and Senate amendment on the issue of liquidation of a 
railroad. The provision permits a party in interest at any time to 
request liquidation. In addition, if a plan has not been confirmed under 
section 1173 of the House amendment before 5 years after the date of 
order for relief, the court must order the trustee to cease the debtor's 
operation and to collect and reduce to money all of the property of the 
estate in the same manner as if the case were a case under chapter 7 of 
title 11. The approach differs from the conversion to chapter 7 under 
section 1174 of the Senate bill in order to make special provisions 
contained in subchapter IV of chapter 11 applicable to liquidation. 
However, maintaining liquidation in the context of chapter 11 is not 
intended to delay liquidation of the railroad to a different extent than 
if the case were converted to chapter 7.
    Although the House amendment does not adopt provisions contained in 
sections 1170(1), (2), (3), or (5), of the Senate amendment such 
provisions are contained explicitly or implicitly in section 1123 of the 
House amendment.


                        senate report no. 95-989

    Section 1174 permits the court to convert the case to a liquidation 
under chapter 7 if the court finds that the debtor cannot be 
reorganized, or if various time limits specified in the subchapter are 
not met. Section 77 [section 205 of former title 11] does not authorize 
a liquidation of a railroad under the Bankruptcy Act [former title 11]. 
If the railroad is not reorganizable, the only action open to the court 
is to dismiss the petition, which would in all likelihood be followed by 
a State court receivership, with all of its attendant disadvantages. If 
reorganization is impossible, the debtor should be liquidated under the 
Bankruptcy Act.

                  Section Referred to in Other Sections

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

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Note: For affordable legal assistance The Center For Debt Management highly recommends Standard Legal's Do-It-Yourself Bankruptcy Forms Software Kits. For credit repair services,
the most trusted law firm in America with over 15 years of experience is Lexington Law Firm.

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Legal Resource Center: United States Code TITLE 11 Filing Bankruptcy Forms Software