Bankruptcy Forms: Filing Bankruptcy Chapter 7 Bankruptcy Software Chapter 13

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TITLE 11–BANKRUPTCY

CHAPTER 7–LIQUIDATION

Sub Chapter IV – Commodity Broker Liquidation

Sec. 764. Voidable transfer

  (a) Except as otherwise provided in this section, any transfer by 
the debtor of property that, but for such transfer, would have been 
customer property, may be avoided by the trustee, and such property 
shall be treated as customer property, if and to the extent that the 
trustee avoids such transfer under section 544, 545, 547, 548, 549, or 
724(a) of this title. For the purpose of such sections, the property so 
transferred shall be deemed to have been property of the debtor, and, if 
such transfer was made to a customer or for a customer's benefit, such 
customer shall be deemed, for the purposes of this section, to have been 
a creditor.
    (b) Notwithstanding sections 544, 545, 547, 548, 549, and 724(a) of 
this title, the trustee may not avoid a transfer made before five days 
after the order for relief, if such transfer is approved by the 
Commission by rule or order, either before or after such transfer, and 
if such transfer is--
        (1) a transfer of a commodity contract entered into or carried 
    by or through the debtor on behalf of a customer, and of any cash, 
    securities, or other property margining or securing such commodity 
    contract; or
        (2) the liquidation of a commodity contract entered into or 
    carried by or through the debtor on behalf of a customer.

(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2618; Pub. L. 97-222, Sec. 17, 
July 27, 1982, 96 Stat. 240; Pub. L. 98-353, title III, Sec. 487, July 
10, 1984, 98 Stat. 383.)


                      Historical and Revision Notes

                         legislative statements

    Section 764 of the House amendment is derived from the House bill.


                        senate report no. 95-989

    Section 764 permits the trustee to void any transfer of property 
that, except for such transfer, would have been customer property, to 
the extent permitted under section 544, 545, 547, 548, 549, or 724(a).


                         house report no. 95-595

    Section 764 indicates the extent to which the avoiding powers may be 
used by the trustee under subchapter IV of chapter 7. If property 
recovered would have been customer property if never transferred, then 
subsection (a) indicates that it will be so treated when recovered.
    Subsection (b) prohibits avoiding any transaction that occurs before 
or within five days after the petition if the transaction is approved by 
the Commission and concerns an open contractual commitment. This enables 
the Commission to exercise its discretion to protect the integrity of 
the market by insuring that transactions cleared with other brokers will 
not be undone on a preference or a fraudulent transfer theory.
    Subsection (c) insulates variation margin payments and other 
deposits from the avoiding powers except to the extent of actual fraud 
under section 548(a)(1). This facilitates prepetition transfers and 
protects the ordinary course of business in the market.


                               Amendments

    1984--Subsec. (a). Pub. L. 98-353 substituted ``any transfer by the 
debtor'' for ``any transfer''.
    1982--Subsec. (a). Pub. L. 97-222, Sec. 17(a), substituted ``but'' 
for ``except'', inserted ``such property'' after ``trustee, and'', and 
substituted ``shall be'' for ``is'' wherever appearing.
    Subsec. (b). Pub. L. 97-222, Sec. 17(b), substituted ``order for 
relief'' for ``date of the filing of the petition''.
    Subsec. (c). Pub. L. 97-222, Sec. 17(c), struck out subsec. (c) 
which provided that the trustee could not avoid a transfer that was a 
margin payment to or deposit with a commodity broker or forward contract 
merchant or was a settlement payment made by a clearing organization and 
that occurred before the commencement of the case.


                    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.

                  Section Referred to in Other Sections

    This section is referred to in section 106 of this title.



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