Sub Chapter III Stockbroker Liquidation
Sec. 742. Effect of section 362 of this title in this subchapter
Notwithstanding section 362 of this title, SIPC may file an
application for a protective decree under the Securities Investor
Protection Act of 1970. The filing of such application stays all
proceedings in the case under this title unless and until such
application is dismissed. If SIPC completes the liquidation of the
debtor, then the court shall dismiss the case.
(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2613; Pub. L. 97-222, Sec. 9,
July 27, 1982, 96 Stat. 237; Pub. L. 103-394, title V, Sec. 501(d)(26),
Oct. 22, 1994, 108 Stat. 4146.)
Historical and Revision Notes
Section 742 of the House amendment deletes a sentence contained in
the Senate amendment requiring the trustee in an interstate stock-
brokerage liquidation to comply with the provisions of subchapter IV of
chapter 7 if the debtor is also a commodity broker. The House amendment
expands the requirement to require the SIPC trustee to perform such
duties, if the debtor is a commodity broker, under section 7(b) of the
Securities Investor Protection Act [15 U.S.C. 78ggg(b)]. The requirement
is deleted from section 742 since the trustee of an intrastate
stockbroker will be bound by the provisions of subchapter IV of chapter
7 if the debtor is also a commodity broker by reason of section 103 of
senate report no. 95-989
Section 742 indicates that the automatic stay does not prevent SIPC
from filing an application for a protective decree under SIPA. If SIPA
does file such an application, then all bankruptcy proceedings are
suspended until the SIPC action is completed. If SIPC completes
liquidation of the stockbroker then the bankruptcy case is dismissed.
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''.
1982--Pub. L. 97-222 substituted ``title'' for ``chapter'' after
``all proceedings in the case under this''.
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 Referred to in Other Sections
This section is referred to in section 349 of this title.