CHAPTER 5CREDITORS, THE DEBTOR, AND THE ESTATE
Sub Chapter III The Estate
Sec. 559. Contractual right to liquidate a repurchase agreement
The exercise of a contractual right of a repo participant to cause
the liquidation of a repurchase agreement because of a condition of the
kind specified in section 365(e)(1) of this title shall not be stayed,
avoided, or otherwise limited by operation of any provision of this
title or by order of a court or administrative agency in any proceeding
under this title, unless, where the debtor is a stockbroker or
securities clearing agency, such order is authorized under the
provisions of the Securities Investor Protection Act of 1970 or any
statute administered by the Securities and Exchange Commission. In the
event that a repo participant liquidates one or more repurchase
agreements with a debtor and under the terms of one or more such
agreements has agreed to deliver assets subject to repurchase agreements
to the debtor, any excess of the market prices received on liquidation
of such assets (or if any such assets are not disposed of on the date of
liquidation of such repurchase agreements, at the prices available at
the time of liquidation of such repurchase agreements from a generally
recognized source or the most recent closing bid quotation from such a
source) over the sum of the stated repurchase prices and all expenses in
connection with the liquidation of such repurchase agreements shall be
deemed property of the estate, subject to the available rights of
setoff. As used in this section, the term ``contractual right'' includes
a right set forth in a rule or bylaw, applicable to each party to the
repurchase agreement, of a national securities exchange, a national
securities association, or a securities clearing agency, and a right,
whether or not evidenced in writing, arising under common law, under law
merchant or by reason of normal business practice.
(Added Pub. L. 98-353, title III, Sec. 396(a), July 10, 1984, 98 Stat.
366; amended Pub. L. 103-394, title V, Sec. 501(d)(21), Oct. 22, 1994,
108 Stat. 4146.)
References in Text
The Securities Investor Protection Act of 1970, referred to in text,
is Pub. L. 91-598, Dec. 30, 1970, 84 Stat. 1636, as amended, which is
classified generally to chapter 2B-1 (Sec. 78aaa et seq.) of Title 15,
Commerce and Trade. For complete classification of this Act to the Code,
see section 78aaa of Title 15 and Tables.
1994--Pub. L. 103-394 struck out ``(15 U.S.C. 78aaa et seq.)'' after
``Act of 1970''.
Effective Date of 1994 Amendment
Amendment by Pub. L. 103-394 effective Oct. 22, 1994, and not
applicable with respect to cases commenced under this title before Oct.
22, 1994, see section 702 of Pub. L. 103-394, set out as a note under
section 101 of this title.
Section effective with respect to cases filed 90 days after July 10,
1984, see section 552(a) of Pub. L. 98-353, set out as an Effective Date
of 1984 Amendment note under section 101 of this title.