After the commencement of a case under this chapter, but before 
final distribution of property of the estate under section 726 of this 
title, the trustee, after notice and a hearing, shall dispose of any 
property in which an entity other than the estate has an interest, such 
as a lien, and that has not been disposed of under another section of 
this title.

(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2607; Pub. L. 98-353, title III, 
Sec. 478, July 10, 1984, 98 Stat. 381.)


                      Historical and Revision Notes

                         legislative statements

    Section 725 of the House amendment adopts the substance contained in 
both the House bill and Senate amendment but transfers an administrative 
function to the trustee in accordance with the general thrust of this 
legislation to separate the administrative and the judicial functions 
where appropriate.


                        senate report no. 95-989

    This section requires the court to determine the appropriate 
disposition of property in which the estate and an entity other than the 
estate have an interest. It would apply, for example, to property 
subject to a lien or property co-owned by the estate and another entity. 
The court must make the determination with respect to property that is 
not disposed of under another section of the bankruptcy code, such as by 
abandonment under section 554, by sale or distribution under 363, or by 
allowing foreclosure by a secured creditor by lifting the stay under 
section 362. The purpose of the section is to give the court appropriate 
authority to ensure that collateral or its proceeds is returned to the 
proper secured creditor, that consigned or bailed goods are returned to 
the consignor or bailor and so on. Current law is curiously silent on 
this point, though case law has grown to fill the void. The section is 
in lieu of a section that would direct a certain distribution to secured 
creditors. It gives the court greater flexibility to meet the 
circumstances, and it is broader, permitting disposition of property 
subject to a co-ownership interest.


                               Amendments

    1984--Pub. L. 98-353 substituted ``distribution of property of the 
estate'' for ``distribution''.


                    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.